The Hong Kong government and the Zug-based association signs a memorandum of understanding in June and finews.asia takes the opportunity to interview the senior official responsible for attracting foreign investment.

In early June, Invest Hong Kong signed a memorandum of understanding with the Crypto Valley Association to facilitate cooperation with Switzerland’s wider fintech ecosystem.

The initial modalities of the deal foresee both providing each other with support and promotional activities aimed at helping increase bilateral investment in both locations.

finews.asia subsequently took the opportunity to interview InvestHK's global head of financial services and fintech King Leung to get a better picture of what is going on.

King Leung, what is the current agreement with Crypto Valley really about?

We see it as a sharing of information. I work for the Hong Kong government, and we intend to invite the association’s delegates to visit the city’s fintech week later this year as a follow-up to the Crypto Valley conference in June.

The reason why we flew all the way was to look for potential clients, and investors and to line up meetings. 

Why are you doing that right now?

The fintech business in mainland China is relatively domestic and we would expect that many fintech founders in the mainland would be interested in the European market and we in Hong Kong are trying to be very proactive about that.

We want to help mainland firms expand to Europe, Switzerland, and Zug in particular.

What about the significant differences in regulation, particularly about Finma’s principles-based approach compared to the HKMA’s prudential supervision regime?

I cannot really say that much about that or make direct comparisons as we are an inbound investment agency responsible for promotion. Our role is to facilitate business activities and we are not qualified to comment on regulatory or policy matters. All I can say is that many web3 business leaders in Hong Kong hold the Swiss regulator and its reputation in high regard. 

Where do you see going in the future?

There are several things that we are very excited about. I would like to follow up on earlier comments that quite a lot of Chinese Web3 founders have been setting up in Hong Kong over the last one to two years.

Sooner or later, they will have to expand to other jurisdictions after getting a decent foothold in Hong Kong. Our policy framework favors Web3 activities and founders based in Hong Kong may not have the connections, so one of the first things we are continuing to do is facilitate this expansion through Switzerland.

Even though the country is not a member of the EU?

We understand that Switzerland is not a member of the EU but we also travelled to Liechtenstein and have been evaluating several different options.

The feedback we are getting from the mainland is that the fund-raising environment is a cautious one and it is hard to raise money and that is why fintechs based there are coming to Hong Kong to tap into international capital right now.

What else do you have in mind?

Another important development is the upcoming launch of the stablecoin licensing regime in Hong Kong. It will be going live but we don’t have the exact timing yet.

Once that is launched it will help cross-border trade settlement, particularly when looking at other jurisdictions that use stablecoin as a backing currency to facilitate such remittances. We believe many goods will be able to be transacted by stablecoins minted in Hong Kong when talking to the HKMA. They are open-minded, and we see it happening in the near future.

How do you see FinTech Week playing out?

The HK Fintech Week is the finale of a month-long schedule of events throughout October this year called Blocktober. Our economy is fairly open, and we love to see the organic growth of all these activities spearheaded by the private sector such as the initiative by Web3 Harbour, a leading industry association in Hong Kong whose board is made up of key business leaders in the space internationally.

As part of Blocktober, there are currently around 10 event organizers including SmartCon, ETHHK, Solana, Animoca, Circle, Christies, and Coindesk (who are doing an activation event for their 2025 conference in Hong Kong). 

What about Bitcoin? Particularly related to its ban in mainland China?

The Bitcoin players can come and they are definitely welcome in Hong Kong. We are open-minded.

Crypto-mining and trading are banned in Mainland China for several reasons. For one, it uses a lot of energy and there are also currency controls. In contrast, Hong Kong has always had a free flow of capital. The city operates under its own independent regulatory and judiciary systems under the one country, two systems form of governance.

Even in stressful times, such as during the financial crisis, money still came and went freely here in Hong Kong.