Hong Kong FinTech Week, held from Oct 31 to Nov 4, 2022, was a game-changing conference since it was the first major in-person event to be held in the special administrative region following the easing of travel restrictions in late September 2022, and the Asian Financial Forum in January 2023 marked the city’s first attempt to bounce back after the HKSAR dropped most travel restrictions. But the events held in October and November 2023 were the culmination of Hong Kong’s reopening to the world and a clear sign that the city is again competing with other major financial centers in magnitude and effectiveness.

Not only was Hong Kong FinTech Week celebrated again in early November this year, but a whole month of activities was planned and held under the brand Viva Hong Kong.

Viva Hong Kong indeed highlighted a series of events, featuring a diverse range of financial, tech, Web3 and cultural events throughout the city. Anchored by Hong Kong FinTech Week 2023, Viva Hong Kong brought together industry leaders, innovators, and startups from around the world to explore the latest trends and developments.

Some of these events, aside from Hong Kong FinTech Week, were the Cyberport Venture Capital Forum, the Global Financial Leaders’ Investment Summit, the SmartmeupHK Festival, and the Hong Kong Financial Forum 2023, which brought together prominent figures from Hong Kong’s business community, influential business chambers, trade organizations and major financial media, as well as Hong Kong and Chinese mainland officials, to generate fresh ideas, as well as fostering momentum for the development of Hong Kong.

Speaking at the Financial Forum, Zheng Yanxiong, director of the Liaison Office of the Central People’s Government in the HKSAR, said the city’s international character is the source of its confidence. Zheng said that “maintaining its international character is the secret code for Hong Kong to thrive and the source of its confidence”.

In addition to actively taking part in national development plans such as the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area, Zheng called on the city to leverage its strengths in financial media and think tanks to establish branded financial forums, gathering top financial intelligence.

He said the city should strive to join the Regional Comprehensive Economic Partnership, the world’s largest free trade agreement, and make further contributions on the international stage, and enhance its role as a hub for offshore renminbi business, serving the country’s efforts in promoting the currency’s internationalization.

Also speaking at the forum, the United Nations’ resident coordinator in China, Siddharth Chatterjee, said that Hong Kong has a unique role to play as China’s offshore capital hub for green finance, as the country needs to accelerate environmentally friendly projects if it is to transition to a low-carbon economy.

These events brought a significant number of people to Hong Kong, and will help Hong Kong not only maintain its status as one of the world’s most important financial centers, but to enhance it.

It is also noteworthy that Hong Kong has stepped up efforts to develop itself into one of the world’s most important Web3 hubs. A few months ago, Financial Secretary Paul Chan Mo-po reportedly said that the time is ripe for Hong Kong to invest in the Web3 digital economy despite recent volatility, as competent market players who survived a “burst bubble” can focus on innovation and make significant strides. Shortly afterward, Chief Executive John Lee Ka-chiu said that the city must “dare to become a leader” in Web3 innovation.

In June, Hong Kong began taking applications to license virtual-asset service providers, and it is studying potential stablecoin regulations. “Our regulation will be tight,” said Hong Kong Monetary Authority Chief Executive Eddie Yue Wai-man, indicating clear thought has already been given to the measures set to come into force.

To sum up, Hong Kong, as shown in all the events recently held, has the potential not only to maintain its role as one of the world’s most important financial centers but to enhance it, … all this in the midst of Hong Kong’s involvement in the GBA and other relevant projects

Also, on June 30, authorities in Hong Kong announced the creation of a task force dedicated to promoting Web3 development. Chaired by the financial secretary, the task force comprises 15 nonofficial members from the relevant market sectors, with the participation of key government officials and financial regulators. The two-year term of the nonofficial members took effect on July 1.

This followed the government’s issuing of a policy statement on the development of virtual assets (VAs) in October 2022, setting out the policy stance and approach toward the sector, to which the market has responded favorably. As VAs are an integral part of a vibrant Web3 ecosystem, Chan announced in the 2023-24 Budget the establishment of a task force to provide recommendations on the sustainable and responsible development of Web3 in Hong Kong.

Chan said, “The blockchain technology underpinning Web3 features characteristics in respect of disintermediation, security, transparency, and low cost. It has the potential to solve many difficulties and pain points encountered in finance, trade, business operations and even day-to-day life. Hong Kong is an international financial center and a metropolis attaching importance to innovation and technology, and embracing the megatrend of Web3 development.”

This approach is consistent with the HKMA’s “Fintech 2025” strategy, which was unveiled in 2021 and aimed at encouraging the financial sector to adopt fintech comprehensively by 2025, and, in the words of Yue, “promote the provision of fair and efficient financial services” for the benefit of Hong Kong residents and its economy.

In addition, “Fintech 2025” is aligned with the national 14th Five-Year Plan (2021-25), which recognized Hong Kong’s economic potential at the national level.

Indeed, while the Web3 industry offers many opportunities, this industry also needs to be properly regulated, since the right regulations and effective governance protect investors, prevent fraudulent activities within the ecosystem, and provide clear guidance to allow companies to innovate in the crypto economy. I also emphasized the need for an internationally coordinated approach, given that governments, central banks and other financial regulators are limited to the specific territory of their jurisdiction, but the digital space is global; therefore, a coordinated approach is needed.

To sum up, Hong Kong, as shown in all the events recently held, has the potential not only to maintain its role as one of the world’s most important financial centers but to enhance it, thanks to Hong Kong’s international role, expertise in the financial industry and related industries and also thanks to tapping into newer industries like Web3, all this in the midst of Hong Kong’s involvement in the GBA and other relevant projects.

The author is a fintech adviser, a researcher, and a former business analyst for a Hong Kong publicly listed company.

The views do not necessarily reflect those of China Daily.