Hong Kong’s Crypto Strategy Explained: Tax Breaks, Licensing, and AI Innovation

Hong Kong is a very prominent financial hub in Asia. Recent developments indicate that this Chinese city-state is preparing to become a regional crypto hub. While speaking at Consensus 2025, Hong Kong Financial Secretary Paul Chan Mo-po asserted that his city-state would remain a stable, open and vibrant market for digital assets.

Here is everything you should know. 

Strengthening Infrastructure and Workforce

Mo-po highlighted the government’s efforts to build the right infrastructure and talent for the crypto industry. He pointed to Cyberport and Science Park as key hubs supporting blockchain innovation. He also emphasized the role of universities and industry partnerships in helping professionals develop essential Web3 skills.

Pro-Web3 Policies in Hong Kong

Hong Kong has a state-backed business hub focused on digital assets—Cyberport’s Web3 network, home to more than 270 blockchain firms.

To attract more investment, the city-state is also considering tax exemptions for hedge funds, private equity firms, and family investment vehicles.

Mo-po described Hong Kong’s crypto regulations as open, fair, and forward-thinking, reinforcing its goal of fostering a strong and sustainable digital asset market.

Slow and Steady: Crypto Licensing on the Way?

Unlike some countries that have rushed into crypto regulations, Hong Kong is taking a steady and measured approach. While the Securities and Futures Commission (SFC) began its crypto licensing program in mid-2023, only nine firms have received approval so far.

Among them are two well-known exchanges, PatherTrade and YAX, which secured SFC licenses in January 2025.

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AI and Blockchain: The Future of Finance in Hong Kong

Mo-po also spoke about the potential of Artificial Intelligence (AI) and Blockchain in finance. He stressed that Hong Kong has clear policies on AI adoption, ensuring responsible and effective use in financial services.

In October 2024, the Financial Services and Treasury Bureau introduced a dual-track policy for AI in the financial sector, further strengthening Hong Kong’s fintech leadership.

With its focus on blockchain, AI, and clear regulations, Hong Kong is setting itself up as a leading crypto and fintech hub. By balancing innovation with strong oversight, the city-state’s approach could influence the future of digital assets across Asia.