Introduction
The "2023 Hong Kong Web3 Festival," jointly organized by Wanxiang Blockchain Labs and HashKey Group, took place from April 12–15 at the Hong Kong Convention and Exhibition Centre. Professor Binghao Zhao, Director of the FinTech Legal Research Institute at China University of Political Science and Law, delivered a keynote speech titled Laying the Legal Foundation for Cross-Jurisdictional Trust in Web3 Applications. This article focuses on the second segment of his presentation: "Rebuilding Confidence in Web3: Hong Kong and Mainland China."
Virtual Asset Regulatory Frameworks: Hong Kong vs. Mainland China
Hong Kong’s Four-Step Regulatory Evolution
Behavioral Regulation (2017)
- The Securities and Futures Commission (SFC) classified tokens into "securities-backed" and "non-securities-backed" assets.
Organizational Regulation (2018)
- Established a sandbox licensing framework for virtual asset investment managers.
Platform Regulation (2019–2023)
- Mandated licensing for all virtual asset trading platforms operating in Hong Kong, effective June 2023.
Industry Regulation (2023–Present)
- Proposed dual licensing for stablecoin issuers and expanded retail investor access.
Mainland China’s Regulatory Trajectory
Recognition (2013)
- Bitcoin classified as a "virtual commodity."
Qualification (2017)
- Banned initial coin offerings (ICOs) and fiat-to-crypto exchanges.
Restriction (2021)
- Crackdown on cryptocurrency mining.
Suppression (2021)
- Declared crypto-related activities as "illegal financial operations."
Convergence Points Between Hong Kong and Mainland China
1. Stablecoin Collaboration
- Mainland China’s digital yuan (e-CNY) is testing cross-border payments with Hong Kong’s "FPS" system.
- Private stablecoin projects like Round Dollar complement CBDC initiatives.
2. NFT Market Dynamics
- Mainland China restricts NFTs to primary markets with fiat-only purchases.
- Hong Kong allows secondary markets for non-security NFTs, attracting mainland platforms.
3. Cross-Border Judicial Coordination
- Historical precedents (e.g., Macau gambling debts) show flexibility in recognizing Hong Kong’s legal frameworks.
- Web3 projects licensed in Hong Kong gain implicit protection in mainland courts.
4. Unified Financial Stability Goals
- Hong Kong’s "same risk, same rules" approach for DeFi aligns with mainland financial oversight principles.
- Shared interest in global virtual asset regulatory leadership.
FAQs
Q: How does Hong Kong’s licensing benefit mainland Web3 projects?
A: Projects licensed in Hong Kong can leverage judicial recognition and investor trust when engaging with mainland entities.
Q: Are NFTs truly unregulated in Hong Kong?
A: Only if they’re not classified as securities—otherwise, SFC oversight applies.
Q: Will mainland China ever relax crypto bans?
A: Experts like Huang Yiping suggest long-term bans may hinder technological progress, hinting at future policy reevaluations.
Conclusion
Hong Kong’s progressive virtual asset policies are reigniting mainland interest in Web3. 👉 Explore how Hong Kong is shaping Web3’s future. As regulatory landscapes evolve, both regions are poised to merge their strengths—balancing innovation with stability.
Next: A compliance checklist for cross-border Web3 startups. Stay tuned!
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