From following the central bank digital currency (CBDC) to permitting crypto retail trades, the city is becoming a potential global centre for cryptocurrencies.

According to the report, Hong Kong has been extremely active with events, particularly in the month of May, as the city embraces numerous crypto-friendly changes. In addition, the city's constitution was amended to include numerous crypto-friendly regulations.

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Hong Kong's financial secretary, Paul Chan Mo-Po, recently disclosed that the city intends to adopt a regulation that promotes the development of the digital assets industry.

Paul acknowledged in a blog post that the crypto market's extreme volatility has led to the bankruptcy and demise of a large number of crypto companies. As a result, many organizations are hesitant to invest in the crypto and Web3 innovations with the highest growth rate.

Nevertheless, the secretary emphasized that now is the moment to board the Web3 train. He added that Hong Kong is committed to promoting this technology so that it becomes a central center for crypto and Web3 in Asia and the world.

Hong Kong has taken numerous positive steps.

Hong Kong's Cyber Security and Technology Crime Bureau (CSTCB) has recently deployed the CyberDefender Metaverse, a metaverse protection platform. The objective of the platform is to educate Web3 consumers on the inherent risks and benefits of Web3 technology.

During the launch, CSTCB stated that the decentralized nature of crypto assets unwittingly enables numerous cyber crimes that target smart contracts, digital assets, wallets, etc., with the solitary intent of stealing victim funds.

In addition, the Hong Kong Police Force expressed concern that the expanding use of cryptography and Web3 could lead to an increase in cybercrime. In the first quarter of 2023, for instance, law enforcement officials documented approximately 663 instances of crypto-related robberies and scams in which victims lost approximately $570 million.

In addition, the department disclosed in its press release that CyberDefender is an effective instrument for preventing cybercrimes. It enables users to post and search any URL, phone number, or email on the police database to determine whether or not it has been associated with a previous offense.

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In the meantime, the Hong Kong SFC (Securities and Futures Commission) has recently concluded its consultation process, which permitted interested parties to provide feedback on the commission's plans. The majority of the approximately 150 submissions approved of the commission's proposed requirements.

As a result, the SFC would start issuing licenses to digital assets service providers so that they can operate in the region. Consequently, this signifies that the city has abolished the retail sales restrictions it imposed a year ago. The report indicates that the amendments to the constitutions will take effect on June 1, 2023.

The new framework stipulates that all crypto platforms that wish to operate in the region must adhere to its regulations. In addition, the law required lesser investors in the region to receive investor training and gain an understanding of vulnerability risks.

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Cryptocurrency trading moves to Hong Kong

Since the city's announcement of the favorable changes, there has been a global influx of crypto platforms seeking to do business in the city. Numerous crypto firms are interested in acquiring a license to conduct business in the city.

The Huobi exchange, for example, has registered with the SFC to offer trading services for crypto assets, including BTC and ETH, in the region. Additionally, in May, Gate.HK, a branch of Gate.io, launched its trading services.

Other enormous cryptocurrency exchanges, such as OKX and BitMEX, are not left behind. They have also signaled their intent to establish branches in Hong Kong, offering crypto trading services to the local populace.

In the meantime, the city is constructing the Cyber Hong Kong Dollar (e-HKD), its central bank's digital currency. In May, the Monetary Authority of Hong Kong announced that the city is presently testing the proposed e-HKD's utility cases.

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The authority has chosen approximately sixteen banks and payment firms to supervise the trial. The authority implied that some overseers would determine whether the endeavor would proceed to the subsequent phase.