Hong Kong's LegCo Unveils Latest Insights on Fintech and Digital Assets Development

LegCo Secretariat releases Policy Pulse on "Latest developments in fintech and digital assets in Hong Kong"

The following is issued on behalf of the Legislative Council Secretariat:

The Legislative Council (LegCo) Secretariat today (October 13) released the latest issue of the Policy Pulse on "Latest developments in fintech and digital assets in Hong Kong". This issue provides a brief overview of how Hong Kong has leveraged technology for innovation and application in the areas such as financial technology (fintech), digital assets (DA), green and sustainable finance and cross-border finance, as well as relevant discussions of LegCo along with suggestions by Members.

As an international financial centre, Hong Kong possesses a robust regulatory system, rich business opportunities and an active financing market. Coupled with its unique advantages of connecting with the Mainland and the world, Hong Kong stands as a premier hub for promoting the integrated development of fintech and the third generation Internet (Web3). According to the newly published Global Financial Centres Index, Hong Kong continued to rank third globally and first in Asia Pacific. On fintech offering, Hong Kong even ranked first in the world.

LegCo has long attached great importance to the development and application of Web3 and DA technologies, and get a head start to form the Subcommittee on Issues Relating to the Development of Web3 and Virtual Assets in October 2023 to study relevant matters. The Policy Pulse summarises Members' recommendations made to the Government, including refining the DA regulatory framework to protect investors; enhancing on-the-job training on Web3 and fintech for practitioners in financial, trading, accounting and legal sectors; and introducing technological concepts such as blockchain and tokenisation into the secondary school curriculum to promote public knowledge of DA and Web3 technologies.

Regarding the regulation of stablecoins, LegCo enacted the Stablecoins Bill in May this year, establishing a licensing regime for issuers of stablecoins pegged to fiat currencies, governing the issuance and related activities of stablecoins, and providing the Monetary Authority with investigatory and enforcement powers. Hong Kong has become one of the first jurisdictions in the world to establish a regulatory regime for stablecoin issuers.

The Policy Pulse points out that, in the light of Members' suggestions, the Government proposed amendments to the Bill, including allowing stored value facility licensees, in addition to the four types of permitted offerors originally proposed, to offer fiat-referenced stablecoins (FRS). In Members' view, this will help promote the wider use of FRS in Hong Kong. Looking ahead, Members suggest seeking the Central Government's support to develop offshore Renminbi stablecoins in Hong Kong, and to boldly explore and practise in emerging financial areas such as DAs and cryptocurrencies, thereby leveraging the role of a "stablecoins testing ground".

The Policy Pulse also details that Hong Kong promotes the development of green and sustainable finance by issuing tokenised green bonds and expanding the local green fintech ecosystem. To date, the volume of green and sustainable bonds arranged in Hong Kong has amounted to around US$43 billion, ranking first in the Asian market for seven consecutive years since 2018. Members urge the Government to formulate measures to attract Mainland enterprises to conduct relevant financing and certification testing in Hong Kong, thereby enhancing the city's attractiveness as a platform for green and sustainable bond issuance. Members also suggest that the Government should explore the feasibility of tokenising carbon credits using blockchain technology.

The Policy Pulse points out that Hong Kong, as a key fintech hub in the region, has established multiple cross-regional financial co-operation platforms to drive fintech innovation and strengthen linkage with international markets. Among these, the annual Hong Kong FinTech Week will be held together with the StartmeupHK Festival in November this year, bringing together over 30,000 industry leaders, speakers and exhibitors from over 100 economies worldwide. To attract more compliant fintech enterprises to establish presence in Hong Kong, Members urge the Government to continuously refine the regulatory framework, encourage trials of financial technology, further streamline licensing process, and promote upgrading and transformation of traditional industries towards digitalisation, thereby promoting complementarity of advantages with the Mainland cities in the Greater Bay Area, as well as contributing to the emerging industries and the innovative development of the digital economy of the country.

The detailed content of "Latest developments in fintech and digital assets in Hong Kong" is available on the LegCo Website. The Policy Pulse, published by the Council Business Divisions of the LegCo Secretariat, covers specific topics and offers a comprehensive overview of related policy developments and summarizes discussions in LegCo.

Source: AI-found images

Hong Kong Customs detects drug trafficking case involving incoming passenger at airport

Hong Kong Customs yesterday (May 9) detected a drug trafficking case involving passenger at Hong Kong International Airport and seized about 2.25 kilograms of suspected heroin, four tablets of suspected Viagra and 26 sticks of duty-not-paid cigarette, with a total estimated market value of about $1.4 million. A man was arrested.

A 61-year-old male passenger arrived in Hong Kong from Kuala Lumpur, Malaysia yesterday. During customs clearance, Customs officers found a total of about 2.25 kg of suspected heroin in his check-in suitcase, and four tablets of suspected Viagra and 26 sticks of duty-not-paid cigarette in his carry-on backpack. The man was subsequently arrested.

The arrested person has been charged with one count of trafficking in a dangerous drug, one count of possession of Part 1 poison, one count of possession of dutiable goods and one count of failing to declare to a member of the Customs and Excise Service the possession of dutiable goods. The case will bebrought up at the West Kowloon Magistrates' Courts tomorrow (May 11).

Customs will continue to step up enforcement against drug trafficking activities through intelligence analysis. The department also reminds members of the public to stay alert and not participate in drug trafficking activities for monetary return. They must not accept hiring or delegation from another party to carry controlled items into and out of Hong Kong. They are also reminded not to carry unknown items for other people.

Customs will continue to apply a risk assessment approach and focus on selecting passengers from high-risk regions for clearance to combat transnational drug trafficking activities.

Under the Dangerous Drugs Ordinance, trafficking in a dangerous drug is a serious offence. The maximum penalty upon conviction is a fine of $5 million and life imprisonment.

Under the Pharmacy and Poisons Ordinance, any person who possesses any poison included in Part 1 of the Poisons List other than in accordance with provisions commits an offence. The maximum penalty upon conviction is a fine of $100,000 and imprisonment for two years.

Under the Dutiable Commodities Ordinance, any person who imports, possesses, sells or buys dutiable commodities without a valid licence commits an offence. The maximum penalty upon conviction is a fine of $1 million and imprisonment for two years.

Members of the public may report any suspected drug trafficking activities to Customs' 24-hour hotline 182 8080 or its dedicated crime-reporting email account (crimereport@customs.gov.hk) or online form (eform.cefs.gov.hk/form/ced002).

Hong Kong Customs detects drug trafficking case involving incoming passenger at airport Source: HKSAR Government Press Releases

Hong Kong Customs detects drug trafficking case involving incoming passenger at airport Source: HKSAR Government Press Releases