On 28 August 2023, HashKey Exchange, the city’s first licensed retail virtual asset exchange (crypto exchange), commenced operations today. The official launch, hosted at the Maritime Museum Central, was attended by key figures from the HKSAR government, leading banks, insurance entities, and representatives from the Big 4 auditing firms.
The platform, which supports direct bank transfers in both USD and HKD, introduced initial fiat trading pairs such as BTC/USD, ETH/USD, and USDT/USD. Joseph Chan Ho-lim, JP, Undersecretary for Financial Services and the Treasury, and Norman Chan Tak-lam, GBS, JP, Chairman of the Hong Kong Web3 Association, were among the notable speakers who shed light on the evolving landscape of the Web3 industry in Hong Kong.
Livio Weng, COO of HashKey Group, highlighted the capabilities of the HEX Engine, a robust system designed to handle up to 5,000 transactions per second (TPS). Emphasizing compliance, HashKey Exchange operates under the stringent guidelines set by the Hong Kong Securities and Futures Commission. This includes rigorous user admission protocols, anti-money laundering measures, and consistent transaction monitoring. Additionally, the platform has fortified its security measures, storing 98% of its digital assets in cold wallets. To ensure transparency and adherence to regulatory standards, regular audits are conducted by the Big 4 accounting firms.
In celebration of its inauguration, HashKey Exchange is offering a temporary waiver on trading fees and has introduced the “HashKey Grand Launch Festival,” providing added benefits for its new user base.
HashKey Exchange, a subsidiary of HashKey Group, stands as the pioneer in Hong Kong, having received the green light for virtual asset trading for retail users from the Securities and Futures Commission (SFC). HashKey Group, a prominent digital asset financial service provider in Asia, delivers a comprehensive suite of services, ranging from trading to Web3 infrastructure, with operations spanning Hong Kong, Singapore, and Japan.
In response to the recent crash in the crypto market, the Financial Deputy Secretary of Hong Kong has published a blog suggesting a regulatory regime would effectively avoid crypto exchange crash scenario amid the so-called “crypto winter”.
Emphasizing transparency, the blog mentioned the use of regulations and how they can help monitor the development of the virtual assets industry in Hong Kong. The article reads, “While actively embracing innovation, there must be a regulatory package that adapts and keeps pace with the times to properly manage risks and create prerequisites for the orderly and vigorous development of the market.”
Though the Financial Secretary’s Office in the blog did not mention the recent collapse of the FTX exchange but seemed only to be highlighting valuable points and advice. Expressing how important it is to maintain safety and adequately manage risks, the Financial Secretary’s Office noted:
“We must make not only full use of the potential brought by innovative technologies, but also be careful to guard against fluctuations and potential risks that they may cause, and avoid these risks and impacts from being transmitted to the real economy.”
Furthermore, the administration advised virtual assets firms to maintain separate accounts to distinguish clients’ assets. They also recommended crypto businesses set aside actual operating expenses for at least 12 months, among other requirements.
To conclude, the Financial Secretary’s Office reflected on the economy, saying, “When considering the entire development direction, one of the core aspects is that if finance serves the real economy, technological innovation should also play a role in serving the real economy.”
Notably, this update comes not long after Hong Kong published its latest policy statement related to the outlook of virtual assets development, including the issuance of tokenized green bonds and the preparation of developing the digital Hong Kong Dollar.
Prior to that, Hong Kong made some critical moves that defined its aim to become an international virtual assets centre. The City’s top financial regulator, the Securities and Financial Commission (SFC), was reportedly set to permit the relisting of Bitcoin (BTC) and Ethereum (ETH) in exchanges that allow retail traders.
Hong Kong-based wine importer and distributor Grand Cru Cellar (GCC) has announced plans to enter the non-fungible token (NFT) industry.
Following the completion of the plan, GCC will become the first wine distributor in Asia to offer a wine NFT. The move will also potentially revolutionise the wine industry in Asia through blockchain and NFT technologies.
The company announced that the wine NFTs would be developed in a strategic partnership with SOLARR, Asia’s first decentralised NFT-Fi platform.
Alex Lee, Founder and CEO of SOLARR, said, “SOLARR’s NFT-as-a-Service (NFTaaS) takes the complication out of NFT-commerce. Our one-stop, end-to-end NFT services offer a highly efficient way for GCC’s wine collections to be auctioned off, eliminating the need for buyers to attend physical auctions.”
The NFTs will include a collection of exclusively designed NFTs representing 360 bottles of Château Margaux fine wine spanning 30 vintages from 1978 to 2007 in the winery’s history.
According to GCC, NFT holders can exchange the NFTs for physical bottles of wines and once redeemed, the NFTs will be destroyed to mark their redemption. Meanwhile, the physical wine bottles will be safely stored until the wine NFT has been redeemed.
GCC further added that these wine NFTs can be traded can be freely traded on SOLARR’s NFT-commerce platform or even given as gifts to family and friends.
Mic Wong, the NFT project representative at Grand Cru Cellar, said, “NFTs will help to increase the liquidity and price discovery of high-end fine wines. The auction market for these fine wines has always existed, but if the bidding flow is low, the wine’s value will be locked up due to a lack of bids.”
Hong Kong-based wine importer and distributor Grand Cru Cellar (GCC) has announced plans to enter the non-fungible token (NFT) industry.
Following the completion of the plan, GCC will become the first wine distributor in Asia to offer a wine NFT. The move will also potentially revolutionise the wine industry in Asia through blockchain and NFT technologies.
The company announced that the wine NFTs would be developed in a strategic partnership with SOLARR, Asia’s first decentralised NFT-Fi platform.
Alex Lee, Founder and CEO of SOLARR, said, “SOLARR’s NFT-as-a-Service (NFTaaS) takes the complication out of NFT-commerce. Our one-stop, end-to-end NFT services offer a highly efficient way for GCC’s wine collections to be auctioned off, eliminating the need for buyers to attend physical auctions.”
The NFTs will include a collection of exclusively designed NFTs representing 360 bottles of Château Margaux fine wine spanning 30 vintages from 1978 to 2007 in the winery’s history.
According to GCC, NFT holders can exchange the NFTs for physical bottles of wines and once redeemed, the NFTs will be destroyed to mark their redemption. Meanwhile, the physical wine bottles will be safely stored until the wine NFT has been redeemed.
GCC further added that these wine NFTs can be traded can be freely traded on SOLARR’s NFT-commerce platform or even given as gifts to family and friends.
Mic Wong, the NFT project representative at Grand Cru Cellar, said, “NFTs will help to increase the liquidity and price discovery of high-end fine wines. The auction market for these fine wines has always existed, but if the bidding flow is low, the wine’s value will be locked up due to a lack of bids.”
One of Asia’s largest non-fungible tokens (NFTs) exhibitions titled “ARTAVERSE” will be hosted in Hong Kong starting on June 3.
NFT marketplace has become more dynamic in this global financial hub, and more online and on-site virtual exhibitions have been hosted amid the COVID-19 pandemic.
The exhibition will be held at Central Harbourfront and over 100 exhibitors will be joining this event, including blockchain and gamification giant Animoca Brands, Taiwanese NFT project Alpacadabraz and RAZE – NFT Fi platform provider.
Daniel Chang, Chief Marketing Officer and organizer of ARTAVERSE, shared his motivation for organising the event, saying that the team aims to provide more platforms for artists to promote their artworks. He believes the project will potentially lay a subversive foundation for the future development of the Metaverse, and further expand the sustainable development of the digital art and cultural industry:
“With Hong Kong being a central hub of the international art technology market, and we hope to take advantage of this to make “ARTAVERSE” a bridge to connect with the international counterparts. It gathers experts from different industries from all over the world, with the aim of thrusting ahead the popularization of blockchain technology from Asia to the globe,”
The exhibition will be divided into three main areas for the public to participate. One of the areas will have over 20 unique exhibition spaces, where the public can enjoy NFT art collections worth over $300 million US dollars, including an example of “Shocked Doge” – one of the most expensive NFT collections in the world.
According to the official statement, the organising team has invested an 8-figure sum into this event.
The organiser said it has invited a Chinese-language music NFT artist to join as the expert consultant and art technology ambassador to “inspire local art enthusiasts to create diversified artworks by leveraging new technologies and to promote local arts to the world.”
“With the rapid expansion of the digital universe of art under Web 3.0, ARTAVERSE represents one of Asia’s largest NFT art exhibitions. I wish to leverage my past experience in listed companies and in investment to synergize with the expertise of Yin Wing Live in organizing performance and entertainment events, to create a platform to push forward Asian art technology development,” said Rocky Wong, CEO of Right Grace Entertainment.
The organiser is promoting VIP tickets and early booking discounts by offering an opportunity to win a limited exclusive NFT.
As part of its research plans,the Bank for International Settlements (BIS) will explore whether decentralized finance (DeFi) technologies can enhance financing for small and medium enterprises in Hong Kong.
The BIS – an umbrella group for central banks – said in a report Wednesday that in 2022, its Innovation Hub will “launch new projects into CBDCs, DeFi and next-generation payments systems”. Other agendas include new projects in green finance, regulatory and supervisory technology and cyber security, it added.
The BIS said that the “Hong Kong Centre will continue to work on mBridge”, referring to “multiple CBDC bridge” in detail. Primarily, to test the integration of wholesale CBDCs from four central banks; on Aurum, a retail CBDC prototype; and on a second phase of the Genesis prototypes. Ultimately, that will further explore the intersection between technology, the financing of green projects and how countries can achieve their carbon reduction targets, it added.
Agustín Carstens, BIS General Manager, said:
“With an expanded network of Hub Centres and exciting new projects, the BIS Innovation Hub is now in a stronger position to innovate in a sound, sustainable way, harnessing the benefits of digital technology, serving the public interest, and working cooperatively with the central bank community, academia and the private sector,”
The BIS Innovation Hub is expanding in 2022 with first projects in the London and Nordic Hub Centres, the expected opening of the Eurosystem and Toronto centres and also the advancement of the strategic partnership with the Federal Reserve System.
“CBDCs and improvements in payments systems continue to be an area of exploratory focus, accounting for 13 out of 17 projects that were active in 2021 or will be launched in 2022,” the BIS report stated.
According to the CBDC Tracker, at least 64 central banks were looking into a retail CBDC by the end of 2021. Among them the most successful was the Nigerian central bank’s launch of eNaira last October, meanwhile, the European central bank has kicked off a two-year experiment into a retail CBDC.
Meanwhile, Hong Kong, the global financial hub, is also actively exploring the possibility of introducing crypto for trading activities, the financial watchdog resumed the discussion of the regulation of stablecoins recently, proposing 5 options to the public.
As part of its research plans,the Bank for International Settlements (BIS) will explore whether decentralized finance (DeFi) technologies can enhance financing for small and medium enterprises in Hong Kong.
The BIS – an umbrella group for central banks – said in a report Wednesday that in 2022, its Innovation Hub will “launch new projects into CBDCs, DeFi and next-generation payments systems”. Other agendas include new projects in green finance, regulatory and supervisory technology and cyber security, it added.
The BIS said that the “Hong Kong Centre will continue to work on mBridge”, referring to “multiple CBDC bridge” in detail. Primarily, to test the integration of wholesale CBDCs from four central banks; on Aurum, a retail CBDC prototype; and on a second phase of the Genesis prototypes. Ultimately, that will further explore the intersection between technology, the financing of green projects and how countries can achieve their carbon reduction targets, it added.
Agustín Carstens, BIS General Manager, said:
“With an expanded network of Hub Centres and exciting new projects, the BIS Innovation Hub is now in a stronger position to innovate in a sound, sustainable way, harnessing the benefits of digital technology, serving the public interest, and working cooperatively with the central bank community, academia and the private sector,”
The BIS Innovation Hub is expanding in 2022 with first projects in the London and Nordic Hub Centres, the expected opening of the Eurosystem and Toronto centres and also the advancement of the strategic partnership with the Federal Reserve System.
“CBDCs and improvements in payments systems continue to be an area of exploratory focus, accounting for 13 out of 17 projects that were active in 2021 or will be launched in 2022,” the BIS report stated.
According to the CBDC Tracker, at least 64 central banks were looking into a retail CBDC by the end of 2021. Among them the most successful was the Nigerian central bank’s launch of eNaira last October, meanwhile, the European central bank has kicked off a two-year experiment into a retail CBDC.
Meanwhile, Hong Kong, the global financial hub, is also actively exploring the possibility of introducing crypto for trading activities, the financial watchdog resumed the discussion of the regulation of stablecoins recently, proposing 5 options to the public.
Although Hong Kong’s art scene is already booming lucratively with galleries and auction houses showcasing world-class art pieces, the city is on its way to adding another milestone on its journey with non-fungible tokens (NFTs).
Hong Kong is known for hosting large-scale international art events. In an artprice.com report titled “Asia: the Art Market’s centre of gravity is heading East”, auction houses’ results in Hong Kong have been exceptional in 2021, with unsold rates at the lowest in the world: just 10% versus a global average of 30%.
The report also stated that in 2021 alone, the contribution, including China, Hong Kong and Taiwan to the contemporary global market (approximately $1 billion), represented 40% of its value.
According to a report by analytics platform DappRadar, NFT trading volume surged in the third quarter of 2021 to $10.67 billion, a 704% increase from the previous quarter. Still, the city seems to be yet unleashing itself for exhibiting digital art or NFTs.
An NFT is a unit of data that certifies the uniqueness, authenticity, and ownership of a digital asset stored on a digital ledger called a blockchain which benefits an artist’s authenticity and the asset’s owner. It can represent real-world objects like art, music, in-game items and videos.
Although NFTs are becoming an increasingly popular way to buy and sell digital artwork, the value of NFTs remains volatile since they are bought and sold online, frequently with cryptocurrency.
After a buyer purchases the original NFT, the buyer will also enjoy ownership of the digital artwork’s built-in authentication, which is proof of ownership. Collectors value those “digital bragging rights” almost more than the item itself.
NFTs have been around since 2014, but it only got its shot to fame this year following Christie’s first sale of a purely digital artwork of artist Beeple’s “Everydays: The First 5000 Days”, which fetched almost $70 million.
The financial hub breeds various crypto-driven firms
Hong Kong has showcased its attributes in becoming a fintech innovation hub by giving birth to “some of the most established and successful crypto companies to date, including the crypto exchange FTX and the digital asset platform Crypto.com, and HK-based Animoca Brands,”
Speaking in an emailed interview with Blockchain.News, Gary Liu, CEO of the South China Morning Post (SCMP), said he is optimistic towards the NFT market in the city :
“The future of NFTs is bright in Hong Kong as a centre for financial innovation and an emerging global arts and culture hub. A few trends give evidence to this based on how the Hong Kong arts community has embraced NFT and the city’s ambitions to grow its reputation as a major fintech hub,”
Liu added that “in recent years, the city has also been bolstering fintech bona fides and attracting startups, including leading NFT and digital asset players.”
NFT overturns traditional art market
Focusing on digital art in Hong Kong, the NFT scene is burgeoning with sporadic exhibitions and auctions.
Via such initiatives, local Hong Kong artists have begun to gain exposure to the world of digital assets where peer to peer transaction is simpler, cutting out the hassle of intermediaries.
For this year’s Operation Santa Claus, a fund-raising initiative organised by SCMP and RTHK since 1988, SCMP invited five Hong Kong artists to mint and auction NFT of their original artworks.
Within the first week of the auction, three out of 8 listed pieces were sold, and 4 out of 5 auction pieces have received bids. The artworks were on display at Start Art Gallery in Hong Kong’s K11 Musea until Nov 21.
The newspaper’s broader efforts to promote NFTs as a technology that facilitates dialogue is a significant step towards popularising NFTs among the masses in Hong Kong; other international gigs in the city are also educating the general public and inspiring artists.
When top-tier auction house Phillips sold artist Banksy’s “Laugh Now Panel A” in Hong Kong on June 2021 for HK$24,450,000 (£2.2million), it marked the first time a major auction house in Asia ever accepted Bitcoin or Ether as payment for physical artwork.
Although Banksy is a well-known artist, such auctions and exhibitions with blockchain technology aiding NFTs can help discover talented artists who have otherwise remained unseen in the traditional art market.
The use of NFTs has already started in various fields such as gaming as profitable digital assets. On the flip side, some initiatives brought forward by companies such as SCMP are creating NFTS to give back to causes such as the environment and local communities.
In October, the ImpactNFT Exhibition invited collectors and NFT enthusiasts to experience and purchase digital artworks with themes constructed around the 17 Sustainable Development Goals by the United Nations: including the fight against climate change, equality and equity in education, and gender equality.
While in October 2021, Digital Art Fair Asia became the first-ever art fair in Hong Kong to feature world-class NFT digital art and an immersive art experience, which lasted for 18 days.
The fair showcased over 200 digital and NFT artworks that allowed the public to understand more about NFTs, while art enthusiasts and collectors could hunt for items to add to their collection. Liu talked about the NFT market development of the city.
“Hong Kong’s role as a major financial hub and a burgeoning centre for contemporary art make it a strong contender as the crypto and NFT hub in Asia,”
Hong Kong enjoys Crypto-friendly facilities
According to a study by Crypto Head titled “The 2021 Crypto-Ready Index”, Hong Kong ranks fourth among 200 countries and territories worldwide in terms of “crypto-ready countries.” This result indicates that the public is well aware of the potential of cryptos.
The study also showed that Hong Kong’s annual online search for crypto increased by 102.1%, and the yearly crypto google searches were at 10,356 per 100,000 people. While the study also showed that there were 124 crypto ATMs or 60,276 people per ATM.
According to their websites, Blockchain Association of Hong Kong and Hong Kong NFT Association are backing to “advocate for the development of proportionate and effective regulation while attracting greater investment and talent into Hong Kong Blockchain Development,” and “improve the rules in the production, circulation, and transaction of products in the NFT field” in Hong Kong.
The artprice.com report also highlighted the importance of the Asian market as the world’s primary zone for exchanging Contemporary artworks, including NFTs, including artists from both the east and a growing number from the west.
Hong Kong’s role as a significant financial hub on a worldwide scale is already a well-established fact. Still, its burgeoning contemporary art also makes it a strong contender as a crypto and NFT hub in Asia and globally.
The city sees a potential future as a leading hub for annual NFT events similar to this year’s NFT.NYC, which hosted 5,500+ attendees, hundreds of leading speakers and the best projects in digital art.
“The city’s exhibition industry is robust, and its love for art, culture, and technology continues to expand. Art Basel, RISE, and HK Fintech Week are evidence that this city can absolutely host a globally impactful blockchain and NFT conference,” Liu said when asked about Hong Kong’s potential in hosting major NFT events.
Hong Kong is receiving more attention for NFT launches due to tight crypto regulations and crackdowns in mainland China, many Chinese celebrities are choosing to launch NFT collections in the city instead.
According to a report by SCMP in October, some of the biggest names in Hong Kong’s entertainment world – including Wong Kar-wai, Gigi Yim and Hins Cheung – have unveiled respective NFT projects.
These projects further indicate that these once-niche digital tokens might be on their way to wider acceptance among the general public, collectors and art enthusiasts.
The future of NFT?
Although the hype around NFTs have made people believe this form of digital assets will change how people invest, some sceptics believe that these could be a bubble similar to the dot-com craze.
According to a March report by The New York Times (NYT), NFT fractional ownership ventures – in which tradable tokens at affordable price points, pegged to the value of desirable digital assets, are divided among a group of buyers – is particularly seen as “disturbing”.
The main index of Mei-Moses, a database of auction sales, now owned by Sotheby’s, shows that during the past decade, the overall value of the many thousands of artworks resold at auction has not increased.
In an interview with NYT, Mei-Moses’ founder Michael Moses said, “how do you value what’s being fractionalised? Value is something incorporated over time, not added in an instant”. Cutting up expensive digital items into tradable tokens made the market “fraught with volatility,” he added. “Basically, it’s gambling. You have no idea of the true value of the work.”
Sceptics state that people should be aware of their investments since the speculations in digital assets such as NFTs that have no physical existence flourished during the COVID-19 pandemic when people spent a lot of time indoors.
