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Hong Kong has pulled ahead of Singapore in attracting technology-driven companies that use cryptocurrency for treasury management and other applications, reinforcing its position as Asia’s leading digital-asset hub, at least for now, according to a crypto industry veteran who advises both governments. “Over the past two years, especially in the first half of this year, many professionals and companies in the Web3 ecosystem have relocated their headquarters to Hong Kong from Singapore,” said Gu Ronghui, a technology adviser to the Monetary Authority of Singapore and a former member of Hong Kong’s Web3 task force, ahead of the city’s largest-ever FinTech Week, which runs from November 3 to 7. The shift reflected Hong Kong’s concerted effort to revitalise its cryptocurrency ecosystem. The city has introduced bank-level regulations for stablecoins, granted licences to virtual-asset trading platforms, and paved the way for qualified institutions to issue Hong Kong’s first batch of stablecoins as early as next year. “Hong Kong seized this timely window to catch up rapidly,” Gu said. Gu is also the co-founder of CertiK, a New York-based blockchain-security company whose clients include Ant Group. The firm, which provides life-cycle security and compliance services for Web3 projects and institutional clients, planned to expand its business and headcount in Hong Kong next year and already operated from Cyberport. Gu will attend Hong Kong FinTech Week as a speaker. “A growing number of technology-driven companies – particularly data and biotech firms with hybrid digital asset treasury models – will settle in Hong Kong,” he added. Under a hybrid treasury model, companies run regular cash-generating businesses while also holding digital assets, giving them greater flexibility in managing liquidity and investment. For example, Fosun-backed Sisram Medical, a Hong Kong-listed Israeli medical-aesthetics company valued at about US$328 million, has tokenised its shares to enable global trading. Yunfeng Financial Group, backed by Alibaba Group Holding, said in September it had bought US$44 million worth of ether for its balance-sheet reserves. Alibaba owns the Post. The use of digital tokens for treasury management among listed companies has gained traction globally. According to research by CertiK, corporate crypto holdings worldwide surpassed US$130 billion this year, comprising mainly bitcoin and stablecoins, which are cryptocurrencies pegged to assets such as fiat currencies. Despite their volatility, digital tokens can serve as a hedge against currency devaluation and, for listed companies, could confer a valuation premium by drawing investor interest, Gu said. “Hong Kong is following global capital-market trends and moving fast to keep pace with changes among the world’s big tech companies,” he added, citing Tesla’s 2021 purchase of US$1.5 billion in bitcoin. “Hong Kong’s regulatory approach is clear,” Gu said. “It wants digital assets to link with the real economy and solve practical problems. It does not want risky cycles where firms simply raise capital, hoard tokens, inflate valuations and then raise funds again.” The Hong Kong government has yet to introduce specific policies covering digital-asset treasuries. However, financial regulators have said that forthcoming stablecoin issuers must be either locally incorporated companies or authorised foreign banks. Gu said Hong Kong’s advantages as a crypto hub remained strong. The city could draw on a large pool of software engineers and developers from mainland China while its deep capital markets were able to attract start-ups seeking access to international funding. “As long as Hong Kong keeps investing in compliance and blockchain infrastructure, its advantages will remain obvious,” he added. Hong Kong recently concluded its year-long phase two trials of the e-HKD, a central bank digital currency built using blockchain technology. In the pilot, Hang Seng Bank, blockchain infrastructure firm Aptos Labs, and Boston Consulting Group, polling 500 retail investors, found that about 60 per cent of Hong Kong and mainland Chinese investors planned to double their asset allocation to tokenisation funds. Mainland respondents expressed high demand for cross-border investment opportunities, as tokenised funds could offer a route for accessing international markets.
