to enter Hong Kong following city’s $6.4M budget allocation to Web3

Cryptocurrency exchange is gearing up to launch a presence in Hong Kong following the local government’s planned $6.4 million (50 million Hong Kong dollar) cash injection into Web3 as per the city’s 2023-24 budget.

Gate Group said on Feb. 22 that it will apply for a crypto license in Hong Kong allowing it to launch “Gate HK.” The firm’s local company, Hippo Financial Services, gained a license in August 2022 to provide virtual asset custodial services.

It comes as Hong Kong financial secretary, Paul Chan, announced the Web3-related funding and the creation of a crypto task force in a Feb. 22 budget speech.

He added Web3 has “huge potential” and the Special Administrative Region of China must keep pace with its “continuous development.”

“We must keep up with the times and seize this golden opportunity to spearhead innovation development.”

Chan outlined the funds would go toward expediting “the Web3 ecosystem development” by organizing international seminars, promoting business cooperation and arranging “workshops for young people.”

He noted a “large number” of companies are considering setting up shop in the city due to the government’s cryptocurrency laws. Gate Group’s founder, Dr. Han Lin, called Hong Kong “a global strategic market” and a “hub” due to its “industry-leading regulatory regime.”

Hong Kong shared its plans on Feb. 20 with a new licensing regime and a proposal to allow retail traders access to licensed crypto platforms.

Due to the influx of business interest, Chan said he “will establish and lead a task force” on virtual asset development made up of members from financial regulators, market participants and “relevant policy bureaux.”

Related: Hong Kong securities regulator adds crypto personnel for industry supervision

The task force would “provide recommendations on the sustainable and responsible development of the sector” according to Chan.

Hong Kong started its push to gain status as a global crypto hub in October 2022 by launching crypto-friendly policy frameworks to regulate the industry within the city.

Despite being a region of China, the city’s special status allows for its own laws and governance. Hong Kong’s crypto push would seem to be in contrast to China’s crypto ban, but it’s reported that officials in Beijing are quietly backing the region’s crypto ambitions.

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