- The Hong Kong Exchanges and Clearing plans to launch new indices for Bitcoin and Ethereum this November.
- The Hong Kong government is looking to introduce new tax incentives for virtual assets.
Amid the tight cryptocurrency ban in China, Hong Kong remains a special case as it continues to position itself as a global digital assets hub in Asia. Recently, its major exchange group announced that it will launch Bitcoin (BTC) and Ethereum (ETH) indices to have a uniform reference price for the said assets in Asia. Meanwhile, its government is considering introducing a policy before the end of the year to expand its virtual asset tax incentives.
HKEX Virtual Asset Index Series
Hong Kong Exchanges and Clearing Limited (HKEX) revealed on Monday its HKEX Virtual Asset Index Series. It aims to support Hong Kong’s push toward becoming Asia’s leading digital assets hub. The new Index Series will offer investors a transparent and reliable benchmark in Asia for two of the world’s largest crypto assets.
HKEX will launch its new platform on November 15. Its goal is to provide a single reference point for BTC and ETH. These crypto assets are currently traded at varying prices across global exchanges.
“By offering transparent and reliable real-time benchmarks, we seek to enable investors to make informed investment decisions, which will, in turn, support the development of the virtual asset ecosystem and reinforce Hong Kong’s role as an international financial center,” said Bonnie Y Chan, CEO of HKEX, in a press release.
Hong Kong’s Planned Tax Incentives for Crypto
Meanwhile, Christopher Hui, Secretary for Financial Services and the Treasury of Hong Kong, highlighted on Sunday the importance of building a more conducive and sustainable market for artificial intelligence (AI) and blockchain ecosystems, especially for financial applications. In his keynote speech at the Hong Kong FinTech Week, he emphasized their vision of enhancing and developing the Special Administrative Region (SAR) of China into an asset management center.
Hui, however, recounted how he had been nagged constantly about the incentives for participants in the growing sector. He explained that Hong Kong already has incentives package for eligible privately offered funds and family-owned investment holding vehicles (FIHV). These include profits tax exemptions at a standard of 16.5% and carried interest for private equity managers at 0%. In addition, certain stamp duties benefit from tax reliefs.
From there, he unveiled some proposed new qualifying investments for tax concessions. The planned regime would cover the following:
- Immovable property outside Hong Kong
- Emission derivatives/allowance
- Insurance-linked securities
- Interests in non-corporate private entities
- Loans and private credit investments
- Virtual assets
The SAR official stated that they plan to expand the jurisdiction’s existing virtual asset regulations. The amendments would include specific policies for stablecoin, particularly on the “products front” by the end of 2024.
