Hong Kong, one of the world’s major financial hubs, has long been committed to cryptocurrency and blockchain technology — but it faces a competitive challenge from the crypto-friendly UAE.

This was a fact acknowledged by panelists Joseph Chan, under secretary for financial services and the treasury in Hong Kong, and Johnny Ng, founder of web3 investment firm Goldford Group, who spoke at Consensus Hong Kong.

“The UAE is really aggressive,” said NG, who served as a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) since 2018.

He said places such as Dubai and Abu Dhabi have established a solid regulatory framework for virtual assets, and each region has also brought this under the auspices of a single, dedicated regulatory authority. Korea, which boasts many millions of crypto users and investors, also has a particular government body responsible for crypto issues, Ng added.

“I think Hong Kong's legislative council can recommend that the government do more, particularly by creating one position to oversee all those things,” Ng said. “As a lawmaker, I will actually help the government to connect with congressmen from other countries, for example, Korea.”

Chan of the Hong Kong Treasury said an enduring attraction of Hong Kong is that there are “no surprises” from regulators, who have shown a consistent commitment to digital assets.

“Our regulation is transparent, certain and predictable, and we have stuck to that all along,” Chan said. “This compares with some other jurisdictions, without naming any names. Be it during a crypto winter or not, Hong Kong has stood by the development of the digital asset industry. If you look at other jurisdictions, as things change and there are ups and downs, they might flip-flop.”

Under Hong Kong's mandatory licensing regime for virtual asset trading platforms (VATPs), 11 licensees have been granted under the framework, which came into effect two and a half years ago.

Regarding the stablecoin regulatory regime that kicked off last August, Chan said the first batch of licenses is targeted for the first quarter of this year.

The license regime for digital asset dealers and custodians is next, and expected to be tabled by Hong Kong’s financial secretary later this year, Chan added, pointing to multiple consultations and bill reading that must first take place.

“It sounds like a long process, but it's very important,” Chan said. “Because it means everyone from the industry knows what's coming, there is enough time to raise your concerns, so there will be no surprises and everybody knows what's going to happen next.”