Hong Kong Accelerates Web3 Initiatives in Ambitious 2024-25 Budget

Hong Kong is poised to advance its web3 initiatives, as outlined in the recently released 2024-25 Budget on February 28. In a noteworthy move, Financial Secretary Paul Chan announced the expansion of the digital yuan pilot testing in the city. Members of the public will soon have the opportunity to establish e-CNY wallets, seamlessly integrating them with local payment services. Despite the prevailing attention on the mainland’s e-CNY program, Hong Kong is gearing up for phase two of its homegrown central bank digital currency project based on the Hong Kong dollar.

Project mBridge Facilitates Cross-Border Payments

The budget highlights the imminent launch of phase one of Project mBridge, a cross-border payment service collaboration involving China, Hong Kong, the United Arab Emirates, and Thailand. Set to debut later in 2024, this initiative is positioned to be a trailblazer on the global stage, settling cross-boundary transactions for corporations through the utilization of central bank digital currencies. Financial Secretary Chan emphasizes the significance of this project, marking a major stride in facilitating international transactions using digital currencies.

Progress in Developing the Web3 Ecosystem

Financial Secretary Chan acknowledges the city’s commitment to the development of the web3 ecosystem, building on the initiatives proposed in the 2023 budget. The budget report indicates “good progress,” particularly in Hong Kong’s tech startup hub, Cyberport, which now houses over 220 companies focused on crypto and web3 technologies. This surge in the number of companies underscores the growing interest and active participation in the web3 sector within the region.

HKMA’s Innovative Approach with Stablecoin “Sandbox”

Further illustrating Hong Kong’s proactive stance in embracing digital innovation, the Hong Kong Monetary Authority (HKMA) is slated to introduce a “sandbox” for entities interested in issuing stablecoins. This initiative reflects the city’s commitment to fostering experimentation and trials in the realm of stablecoin issuance. The sandbox approach is designed to provide a controlled environment for entities to explore and test the issuance of stablecoins within defined parameters.

Conclusion: Hong Kong’s Vision for a Digital Future

The 2024-25 Budget of Hong Kong reveals a clear vision for a digital future, with a robust focus on advancing web3 initiatives. From expanding the digital yuan pilot testing to pioneering cross-border payment projects and nurturing the web3 ecosystem, Hong Kong is positioning itself as a dynamic hub for digital innovation. As the city embraces technological advancements, the initiatives outlined in the budget reflect a strategic and forward-looking approach to shape the future of finance and technology in the region.