Is Hong Kong the Next Web3 Hub?

Last year's Hong Kong Fintech Week sparked a significant shift as Hong Kong’s government unveiled ambitious plans to become a Web3 hub. Beyond the headlines, what's the real story for Web3 builders in Hong Kong?

In 2022, Hong Kong’s approach to Web3 transformed. The government issued a policy statement on Virtual Assets, emphasizing its commitment to the industry. Over the last 12 months, a flurry of new guidance from the government emerged. The city's regulator, the Securities and Futures Commission (SFC), released a virtual asset trading license handbook, a HK$50 million budget was allocated to promote Web3, and a Web3 task force featuring private industry experts was created to advise the government.

While the world tightened regulations on Web3 and made it more difficult for firms, Hong Kong provided clear guidance and support.

How Did We Get Here?

Hong Kong’s financial prowess and entrepreneurial spirit have always attracted global Web3 entrepreneurs. Iconic blockchain and crypto firms like Animoca Brands, Crypto.com, BitMEX, and Tether trace their roots to the city. However, over the years, many started to explore friendlier jurisdictions like Singapore and Dubai, leading to a decline in Hong Kong’s Web3 industry.

The government took notice and took decisive action to address these shortcomings. The city's stock exchange introduced crypto ETFs, the government licensed two digital exchanges, and corporates embraced NFT technology. Regular Web3 meetups and international conferences have become the norm.

Building in Hong Kong, Beyond the Headlines

So, what has been the reality for builders in Hong Kong? Pretty good, actually.

Our company, DOTTED, founded two years ago in Hong Kong, has seen a surge of interest in adopting Web3 and NFT technologies across corporate interests. Our client list includes Hong Kong’s largest museum, university, medical insurance company, music festival, and one of the first international sporting tournaments held in the city after COVID-19.

Despite the macro headwinds and difficulty others had in the industry, we have successfully raised during the last year. One of our investors and biggest backers is layer 2 protocol Polygon, which powers our corporate NFTs.

Increasingly Sophisticated Customers

Clients in Hong Kong have become increasingly sophisticated towards Web3 and are looking for more than just a one-off NFT drop. They realize an NFT represents an opportunity to create a lasting connection and data point with customers that can be used to build long-term utility.

We partnered with one of Hong Kong’s largest public art installations, DOUBLE DUCKS by Florentijn Hofman, to distribute the official NFT of the event. We also launched a campaign to raise awareness of digital assets in the city. We partnered with over 20 vendors to provide HK$ 2 million worth of vouchers and coupons to shops, including restaurants, cafes, and hotel staycations.

Is the Future of Web3 in Hong Kong?

I would say a resounding yes.

As we approach the first anniversary of the government's Web3 policy, DOTTED is partnering with the central bank, the Hong Kong Monetary Authority, to launch its 30th Anniversary NFT collection for the Hong Kong Fintech Week 2023.

Since entering the crypto industry in 2018, the experiences this year our team received from clients and the industry have made me more bullish on the space of Hong Kong. Does our industry face headwinds, of course? But the commitment by our regulators, policy markets, and government to listen to the industry and design pro-growth rules has been incredibly inspiring for our future.

But don’t take my word for it, DYOR, and come to Hong Kong. This place has and will continue to build the future of Web3.