Hong Kong remains committed to digital assets but feels competition from an ‘aggressive’ UAE

Core Viewpoint - Hong Kong, a significant financial hub, is facing competitive pressure from the UAE, which has established a robust regulatory framework for cryptocurrency and blockchain technology [1][2]. Group 1: Regulatory Environment - The UAE has created a solid regulatory framework for virtual assets, with dedicated regulatory authorities in regions like Dubai and Abu Dhabi [3]. - Hong Kong's regulatory approach is characterized by transparency, certainty, and predictability, which has remained consistent even during market fluctuations [5]. - Under Hong Kong's mandatory licensing regime for virtual asset trading platforms (VATPs), 11 licenses have been granted since the framework's implementation two and a half years ago [5]. Group 2: Future Developments - The stablecoin regulatory regime initiated in August is expected to issue its first batch of licenses in the first quarter of this year [6]. - A licensing regime for digital asset dealers and custodians is anticipated to be proposed by Hong Kong's financial secretary later this year, following necessary consultations and legislative readings [6][7]. - The regulatory process, while lengthy, is deemed important for ensuring industry participants are informed and can voice their concerns, minimizing surprises [7].