Hong Kong regulators are considering an extension on tax breaks to include digital assets like crypto and the use of artificial intelligence-technology in finance sectors.
According to an Oct. 28 Bloomberg report, Hong Kong’s Secretary for Financial Services and the Treasury Christopher Hui said that Hong Kong regulators have proposed an extension to tax break laws that would accommodate digital asset investments.
A tax break means that Hong Kong citizens who own crypto investments may see a tax reduction in the near future. Hui said the tax break law is set to be proposed as a legislation by the end of this year.
He said the move is meant to show Hong Kong “further recognize its role for asset allocation.”
The Hong Kong Securities and Futures Commission promised to deliver a finalized list of crypto exchanges that will receive full licenses by the end of the year, said Eric Yip executive director for intermediaries at the SFC.
Yip added by early 2025, regulators will form a consultation panel for the licenses exchanges to maintain cooperation efforts. The city is also planning to publish a comprehensive regulatory framework for crypto-focused over-the-counter trading desks and custodians.
On the same day, the Hong Kong Exchanges and Clearing Limited released a statement that it will launch a Virtual Asset Index Series on Nov. 15 2024.
The Hong Kong index series aims to provide more benchmarks for Bitcoin and Ether pricing for regions within Asia-Pacific time zones. These developments are part of Hong Kong’s efforts to establish itself as a “leading digital assets hub” in Asia.
“By offering transparent and reliable real-time benchmarks, we seek to enable investors to make informed investment decisions, which will in turn support the development of the virtual asset ecosystem and reinforce Hong Kong’s role as an international financial center.”
HKEX Chief Executive Officer, Bonnie Y. Chan
Moreover, the Hong Kong government gave the green light for different regulatory agencies to start creating policies that cover the use of AI technology, anticipating a future when financial institutions and other sectors in Hong Kong will be able to use AI in their operations.
“Hong Kong’s financial sector has what it takes to promote AI adoption — sizable markets and rich scenarios,” said Hui.
Hong Kong is currently caught in the crossfires between the technology conflict between US and China. Due to this rivalry, many consumers in Hong Kong cannot access the world’s most popular AI service providers, which are mostly US-made, including OpenAI’s ChatGPT and Gemini by Google.
On the other hand, Hong Kong consumers also have a hard time accessing Chinese-made AI tech services provided by Baidu Inc. and ByteDance Ltd. Meanwhile, there has been an uptick in AI-usage in business and financial sectors in different institutions across the globe.
In order to solve this problem, Hong Kong wants to develop its own AI technology. The Hong Kong University of Science and Technology is developing InvestLM, a large language model tailored to local market rules. Once it is fully operational, the technology will be made available for financial services in Hong Kong.
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