On May 27, Beijing released a white paper titled “Internet 3.0 Innovation and Development,” which aims to support and advance Internet 3.0 (web3) and the metaverse, according to Chinese media, ThePaper. However, Binance CEO Changpeng Zhao (CZ) pointed out on Twitter that the timing of the white paper’s publication is just days before the June 1 application opening for Hong Kong cryptocurrency exchanges. CZ’s tweet suggests that the release of Beijing’s web3 white paper and Hong Kong’s regulatory push for cryptocurrency exchanges may indicate a more open approach to digital assets in the region. Jason Fang from Sora Ventures has also shared similar thoughts on CryptoSlate’s SlateAsia podcast, viewing Hong Kong as the “test bed” for crypto regulation in the region. The development raises questions about the potential implications and impact on the broader cryptocurrency industry in the area.
The white paper was released as a partnership between the Beijing Municipal Science and Technology Commission and the Zhongguancun Science Park Management Committee, titled the “Beijing Internet 3.0 Innovation and Development White Paper (2023).” The report emphasizes a commitment to web3 and Metaverse innovations. The Paper, published by state-backed media conglomerate Shanghai United, reports that Chaoyang District in Beijing plans to invest no less than 100 million yuan annually in special funds to support the construction of the web3 industry ecosystem. This is part of an effort by the district to become a leading region for the “Internet 3.0 industry by 2025.”
Hong Kong’s Financial Secretary Paul Chan announced earlier this year the completion of the government’s crypto regulation framework, which will have regulatory requirements for virtual asset providers similar to those for traditional financial institutions from June 1, marking a significant change in the region’s approach to cryptocurrency regulation. Chan emphasized Hong Kong’s commitment to supporting the growth of the Web3 industry in the region, aiming to become a hub for crypto innovation.
Hong Kong Securities and Future Commission’s Easing of Requirements for Responsible Officers
The Hong Kong Securities and Future Commission (SFC) is easing the requirements for responsible officers (ROs) on cryptocurrency exchanges in preparation for the June 1 application opening for crypto trading licenses under the Securities and Futures Ordinance (SFO) and Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), as reported by CryptoSlate on May 24. An RO is an individual who holds a crucial position within the senior management of a company. To become an RO, the individual must obtain a license from the SFC and receive approval as an RO for a specific exchange. Therefore, ROs need extensive experience as it is a prerequisite for obtaining the required license.
Due to the current shortage of experienced ROs in the crypto sector, the SFC has revised its requirements so that exchanges now only need two ROs instead of four, adopting a “pragmatic approach” in light of the talent crunch.
The developments in Beijing and Hong Kong will likely be closely monitored by the crypto community as they may shape the future of the digital asset industry in the region and beyond. Possible benefits include increased innovation and a more transparent regulatory environment, while challenges include meeting compliance requirements and adapting to new regulations.