Vitalik Buterin questions the stability of Hong Kong’s crypto policy

Blockchain projects planning to expand operations in Hong Kong should weigh the stability of the authorities’ crypto-friendly stance. This was stated by Ethereum co-founder Vitalik Buterin, writes The Block.

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In October 2022, the Financial Services and Treasury Bureau of the Hong Kong Special Administrative Region announced a relaxation of restrictions on digital assets. Subsequently, on the Hong Kong Stock Exchange began trading two ETF linked to US-listed cryptocurrency futures.

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In December, the G-Rocket accelerator announced that it would help set up business for 1,000 Web3 startups in Hong Kong over the next three years.

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The authorities of the jurisdiction allocated $6.4 million in the annual budget to support the industry and expressed willingness to welcome crypto companies from around the world. In July, the government established a dedicated Web3 development task force.

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“If a crypto project wants to make Hong Kong its home, it would want some certainty — not only that it is friendly now, but that this will endure years hence, as regulatory, political and other events unfold,” Buterin said at the Web3 Transitions conference in Singapore.

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He said he has a limited understanding of Hong Kong’s relationship with the mainland.

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Since 2017, trading Bitcoin and other cryptocurrencies on local exchanges in China has been illegal. Later, authorities tightened oversight of industry participants.

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Buterin noted that the industry-friendly stance toward the sector in Hong Kong is now evident.

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“But the main question for me, and one I think everyone is asking, is this: how stable is this level?” he added.

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The Ethereum co-founder stressed that ongoing government support for cryptocurrencies in the jurisdiction is a \”key variable,\” hard to judge.

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Bloomberg reported that Beijing has taken a favorable stance toward Hong Kong’s drive to become a crypto hub.

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Former BitMEX CEO Arthur Hayes suggested that the PRC is trying to re-enter the industry through the region. A similar view was voiced by Animoca Brands co-founder Yat Siu.

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However, the head of China Pacific Insurance (CPIC) disagreed with such prospects.