"Hong Kong Evaluates Stablecoin Laws to Strengthen Digital Asset Hub Status - Park Wan-ki, Barrister"

# Hong Kong Rises as a Leading Financial Hub, Blending Traditional Finance with Digital Assets Hong Kong is rapidly emerging as a pivotal financial center that merges traditional finance with digital assets. According to Barrister Won Ki Park, Hong Kong remains a robust contender as Asia's financial hub due to its distinctive legal framework and innovation-centric approach. Park recently discussed Hong Kong’s competitive advantages in an interview with Hyun Ji Lee, host of *Catch the Money*, a segment by Block Media. # British-Origin Legal Framework Maintained Since 1997 Park pointed out that Hong Kong has preserved its British-influenced legal system even after its 1997 handover to China. The region follows a dual legal practice system, dividing responsibilities between barristers and solicitors. “The legal system here necessitates high levels of expertise, often requiring over 15 days of preparation for a single case,” Park elaborated. # Bitcoin ETFs Reflect “Open Conservatism” in Regulation Hong Kong’s stance on digital assets is described as “conservative yet innovation-friendly.” Park mentioned that Hong Kong employs a negative regulatory framework, allowing all activities unless specifically banned. Although Hong Kong considered the introduction of Bitcoin ETFs before the United States, regulatory concerns about investor protection postponed their approval. Consequently, liquidity in the ETF market has been largely concentrated in the U.S., making Hong Kong a relatively late entrant in this domain. # Stablecoins and Potential Yuan-Based Payment Ecosystem Hong Kong plans to debate its stablecoin-specific regulatory framework by December 2024 in its Legislative Council. Park anticipates a rapid corporate shift toward issuing stablecoins once the legislation is enacted. He also highlighted the potential launch of a Yuan-backed stablecoin, paving the way for a multipolar global payment ecosystem where the U.S. Dollar and Chinese Yuan coexist in the long term. “Uncertainties in U.S. tariff policies and China-led regional cooperation could accelerate this transition,” Park added. # Tax and Regulatory Advantages Over Singapore When comparing Hong Kong to financial giants like Singapore and Dubai, Park emphasized Hong Kong’s favorable tax system. “Corporate tax rates cap at 16.5%, and there are no value-added taxes or taxes on foreign income, making Hong Kong highly tax-efficient,” he outlined. Citing the city’s recovery, Park noted that in September 2024, the Global Financial Centres Index ranked Hong Kong as Asia’s top financial hub and third globally. # Strengthening Regulation While Expanding the Digital Ecosystem Recent trends show an increase in licenses being granted to digital asset exchanges in Hong Kong. Park explained that financial authorities here often use a sandbox approach, observing businesses before issuing licenses. “Though conservative, this structured approach is yielding results,” he said. Looking forward, Park forecasted significant growth in industries tied to digital finance, such as stablecoin issuers, digital asset exchanges, custodial services, and OTC platforms. He predicted that the convergence of digital assets and traditional finance could instigate fundamental shifts across Hong Kong’s financial landscape.