Hong Kong launches AI and virtual asset initiatives, introducing policy guidelines and tax exemptions to strengthen its position as a business hub.
Hong Kong has introduced its first policy guidelines focused on artificial intelligence (AI) in finance. This move aims to enhance the city’s position as a leading Asian business hub. According to a Bloomberg report, government officials announced a framework for various regulatory agencies to develop policies governing AI. They view AI as essential for the future of finance and other industries.
Additionally, the officials introduced the idea of a tax exemption for owning digital assets, including cryptocurrencies. Such an exemption could lead to lower taxes for the people of Hong Kong who have invested in cryptocurrencies. Hui, a government spokesperson, said that laws providing the tax credit will be introduced before the year ends. This proves that Hong Kong intends to allocate assets.
Hong Kong SFC to Finalize Crypto Exchange Licenses by Year-End
Another example is the Hong Kong Securities and Futures Commission (SFC) which has been advancing, too. The executive director for intermediaries, Eric Yip, said that the list of the exchanges to be granted full licenses will be determined before the end of the year. The consultation panel for licensed exchanges will be set up by early 2025 to improve the cooperation. Moreover, the city intends to release a detailed set of rules for the over-the-counter trading desks and the crypto custodians.
On the same day, Hong Kong Exchanges and Clearing Limited (HKEX) unveiled the development of a Virtual Asset Index Series for November 15, 2024. This index series will be designed to offer reference rates for Bitcoin and Ether for the Asia-Pacific market. According to HKEX CEO Bonnie Y. Chan, the transparent benchmarks will help investors to make better decisions to strengthen the virtual asset market.
Moreover, the Hong Kong government has cleared the conception of policies on using AI technology. Hui was optimistic about the financial sector’s adoption of AI, highlighting strong markets and various cases.
However, Hong Kong has some issues because of the technological tension between the USA and China. Most customers cannot afford some of the most common and used AI services from the United States, like OpenAI’s ChatGPT and Google’s Gemini. Likewise, using AI technologies from China, such as Baidu or ByteDance, is restricted.
To counter these problems, Hong Kong wants to develop its own artificial intelligence. The Hong Kong University of Science and Technology is developing InvestLM, a large language model for local market regulations. Once operational, this technology will support financial services in Hong Kong. These initiatives reflect Hong Kong’s strategic efforts to navigate the evolving landscape of technology and finance.
