There are two types of governments in this world: governments that support crypto and governments that don’t. The government of Hong Kong has shown itself to be among the first in a fresh and frankly impressive show of support for not just the usage of Artificial Intelligence but also crypto.
China is not known for being friendly towards cryptocurrency, but this has not stopped Hong Kong, the special administrative region of China, from extending a friendly gesture towards crypto folk.
The UK tax code is over 21,000 pages and is the longest in the world.
— Adil (@FinanceAdil) October 28, 2024
In contrast, the Hong Kong tax code is just 350 pages.
An apt representation of the state of this country.
Hong Kong is set to introduce a policy that extends tax incentives to private funds and family offices that invest in crypto on behalf of wealthy clients.
According to Christopher Hui, Hong Kong’s Secretary for Financial Services and Treasury, the policy is one way the city ensures that it has the right conducive environment for blockchain to thrive, most especially its applications.
Hui also mentioned, during a keynote speech at the Hong Kong FinTech Week event on Sunday, that the government has been questioned several times about what incentives it has to offer blockchain and cryptocurrency.
Hong Kong is not a stranger to providing tax incentives to the finance sector. It already has tax incentives for some privately offered funds and family investment vehicles as long as they meet specific requirements. One such incentive is a 16.5% profit tax exemption and a 0% tax on carried interest for private equity managers.
The newly proposed policy aims to support the development and investment of crypto into regulated products. It is in line with Hong Kong’s decision to start regulating virtual asset trading through the Virtual Asset Trading Platform (VATP) regime, which was implemented in June 2023. The Hong Kong government has also promised to introduce a policy for stablecoins on the “products front” before the year runs out.
However, crypto is not the only thing Hong Kong will be developing a policy for. On October 28, the Hong Kong Financial Services and Treasury Bureau (FSTB) announced in a report that it is receptive to businesses in the financial services industry using AI in their businesses.
The FSTB also recommended what it called a “dual-track approach” for Hong Kong’s financial services industry to foster AI development and address potential challenges.
In the FSTB report, the Bureau stated that it intends to work with financial regulators and service providers to facilitate responsible AI adoption.
In Hong Kong, AI is currently being used in financial sectors, including insurance, securities, banking, accounting, green and sustainable finance, and pension fund management.
🚨Just In 🚨
— Crypto News (CoinGape) (@CoinGapeMedia) October 28, 2024
🇭🇰Hong Kong drafted their first policy guidelines highlighting the use of #AI in finance and floated a tax break for virtual assets.
This move is a part of Hong Kong's efforts to promote itself as an Asian business center🌐
Hong Kong will set up a supervisory framework to oversee and mitigate the various risks associated with the adoption of AI in these businesses, especially job displacement, intellectual property rights protection, and protection for stakeholders.
HODL Team
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