Hong Kong's new regulations for virtual asset trading platforms require them to obtain licenses from respected financial regulators, such as the Securities and Futures Commission, in order to provide investors with greater confidence in the market. The cost of obtaining a license could be as high as $20 million, which may deter smaller companies. Exchanges must meet strict requirements, including maintaining a paid-up share capital of HKD 5 million ($640,000) and liquid assets equivalent to at least a year of operating expenses. The hope is that once platforms obtain licenses, investors can trade in fairly liquid markets and have exposure to virtual assets. However, derivatives are still not allowed and tokens must meet certain criteria, including having a one-year track record and being listed in two acceptable indices.

Hong Kong lawmaker Johnny Ng has expressed his desire for discussions on connecting virtual asset platforms in Hong Kong with digital asset exchanges in Shanghai. Ng also hopes for more talent exchanges between Hong Kong and mainland China. The Shanghai-Hong Kong Stock Connect program already provides a financial asset link between the two regions. Hong Kong is aiming to become a crypto hub again with its new licensing regime, while China has implemented several bans on crypto-related activity.

Hong Kong's only two licensed cryptocurrency exchanges, HashKey Exchange and OSL, have both received upgrades to their licenses, allowing them to serve retail investors with immediate effect. Previously, they were only licensed to serve professional investors with a portfolio of at least $1.02 million.

Hong Kong lawmaker Johnny Ng has expressed his desire to explore the possibility of interconnectivity between digital asset platforms in Hong Kong and Shanghai-based digital asset exchanges. Ng hopes for more cooperation between web3 industries in Hong Kong and Shanghai, and for licensed virtual asset trading exchanges in Hong Kong to be interconnected with Shanghai's exchanges in the future. He also hopes for more web3 talent exchanges between Hong Kong and the mainland. Despite China's ban on cryptocurrency transactions, Hong Kong has welcomed crypto firms and recently introduced a full licensing regime for virtual asset service providers.

Hong Kong is looking to establish itself as a digital-asset center, and the first license under its new crypto regulations has been granted to HashKey Exchange. This move legalizes the retail trading of tokens in the city and is part of the officials' efforts to foster a global hub for the digital-asset sector.

Shanghai, China's financial hub, has announced plans to establish a blockchain infrastructure by the end of 2025 and connect with Hong Kong and Singapore for use in various fields such as digital assets, transportation, industrial internet-of-things, supply chain finance, and carbon management.

The global market is closely watching the US Federal Reserve's interest rate meeting this week, with expectations high for a potential increase. Hang Seng Bank's Director of Commercial Banking, Lin Yansheng, predicts that interest rates will rise but only temporarily. The bank has recognized the need for crypto and has outlined rules for virtual asset businesses to operate, allowing them to open standard banking accounts with an AIP license from the Securities Regulatory Commission. Yansheng acknowledges that Hong Kong's high-interest rates have slowed loan growth, but he expects interest rate cuts next year to improve the situation.

During his visit to the three ASEAN countries (Singapore, Indonesia and Malaysia), Xu Zhengyu, director of the Hong Kong Treasury Bureau, said that since the publication of the "Policy Declaration on the Development of Virtual Assets in Hong Kong" in October last year, more than 90 mainland and overseas companies related to virtual assets Expressed intention to settle in Hong Kong.

Fubon Bank, the Hong Kong arm of Taiwan's Fubon Financial Holding Co., has announced plans to launch a pilot real estate tokenization program on Ripple's CBDC platform in Q3 2023. The program will involve issuing loans in digital Hong Kong dollars and using them to purchase real estate properties and other related investments. Fubon Bank may also collaborate with real estate companies to enable them to accept e-KHD as a payment method. The initiative is part of Hong Kong's new e-HKD pilot program, and Ripple has disclosed plans to revolutionize the real estate industry using tokenization.

Hong Kong and the Kingdom of Saudi Arabia are increasing their financial collaboration with a focus on tokenization and payments infrastructure. The two central banks, HKMA and SAMA, signed a memorandum of understanding to promote joint discussions on financial innovation and share expertise in areas such as tokenization and payment infrastructure. The announcement does not specify whether the development will include any joint efforts related to cryptocurrencies like Bitcoin. Hong Kong is already participating in several inter-jurisdictional tokenization initiatives, including Bank of China's recent issuance of a $28 million tokenized security on the Ethereum blockchain.