Hong Kong welcomes Bitcoin—but cautiously

Hong Kong has taken a significant step in integrating digital assets into its financial ecosystem by officially recognizing Bitcoin and Ethereum as proof of wealth. This move signals the city’s ambition to position itself as a global crypto hub. But is it a true embrace of decentralization (distribution of control away from a central authority), or is it primarily a strategy to reinforce its capital markets?

To explore the impact of this shift, The Crypto Radio spoke with Auki Labs, a Hong Kong-based decentralized project, about what it means for web3 (a user-owned and trust-minimized digital ecosystem), the city’s competitiveness in the global market, and how regulatory decisions will shape the adoption of decentralized technology.

While crypto proponents see this as a step toward broader integration, perspectives from traditional finance and corporate sectors suggest the move may be more limited in scope than it first appears.

A step toward web3 or a financial strategy?

Hong Kong’s investment visa program, the New Capital Investment Entrant Scheme (CIES), allows high-net-worth individuals to relocate to the city. Applicants must prove a net worth of at least HK$30 million ($3.86 million USD) for two years before applying and invest the same amount into permissible assets.

The program offers an initial two-year visa, which can be extended, with permanent residency possible after seven years. While Bitcoin and Ethereum can be used to prove wealth, they cannot be invested under the scheme.

Despite the move seeming mainly focused on strengthening its financial markets, Santeri Aramo, Auki Labs co-founder still believes this is a step in the right direction.

“The steps are meant to integrate digital assets into the financial system, and it aligns with the ambition of wanting to be a global crypto hub,” Aramo told The Crypto Radio. “But the true test will come down to the policies Hong Kong adopts regarding decentralized ownership, privacy, and interoperability.”

While Hong Kong’s efforts to attract crypto wealth are evident, many white-collar professionals from traditional finance and corporate sectors remain largely unaware or indifferent to the city’s visa-by-investment program. This suggests that its influence may be confined to capital markets rather than driving broader industry-wide adoption.

Competing with global web3 hubs

Hong Kong is a well-established financial center, but when it comes to web3, it faces strong competition from cities like Dubai and Singapore. While Hong Kong is making strides in fostering a crypto-friendly environment, other jurisdictions have taken more aggressive regulatory approaches.

“When it comes to web3 friendliness, Dubai is leading the way, while Singapore has clear regulatory clarity in attracting institutional players,” Aramo noted. “Hong Kong has some catching up to do because it is a more traditional and compliance-heavy environment. But what it has going for it are its deep roots in capital markets, which it can tap into once most uncertainty has been cleared.”

Hong Kong’s latest foreign direct investment or FDI (when a company or individual from one country invests in a business or asset in another country) figures highlight its growing influence as a global business hub. In 2024, the city assisted the expansion and establishment of 539 companies from overseas and Mainland China into its economy—a remarkable 41% increase from the previous year.

This influx of investment added more than HK$67.7 billion ($8.7 billion USD) into the economy and generated approximately 6,864 new jobs. Notably, innovation and technology led the charge with 120 new companies, while financial services and fintech followed closely with 110. These figures reaffirm Hong Kong’s strategic positioning as a rising powerhouse in the global crypto and fintech sectors.

Interest in decentralized spatial computing

Beyond financial assets, blockchain is also shaping emerging sectors like spatial computing (technology that blends digital and physical spaces for seamless interaction). The potential for companies to own their digital spaces while maintaining control over their data is driving interest in decentralized solutions.

“We see great interest in decentralized spatial computing for various reasons,” said Aramo. “Corporations like this because it allows them to own their digital spaces and the data within them. A balance needs to be struck between decentralization and the desire for a more centralized model.”

The challenge, however, lies in governance. As Aramo pointed out, the speed of adoption will depend on how Hong Kong balances these competing interests and how effectively its regulatory framework evolves.

“Clarity tends to help adoption the most,” he emphasized, stressing that well-defined policies are essential to fostering confidence in decentralized technology.

Despite uncertainties around full-scale decentralization, Hong Kong’s market sector acknowledges the profound influence of crypto on traditional finance. The staggering 93% surge in HK Asia Holdings Limited’s shares one day following the purchase of just 1 BTC highlights the undeniable impact of digital assets on market dynamics.

Crypto’s role in Hong Kong’s evolving market

While projects such as Auki Labs see the potential for web3 expansion, corporate perspectives suggest the primary focus remains on strengthening capital markets rather than disrupting them.

By embedding digital assets into its existing financial framework, Hong Kong is taking a pragmatic approach—leveraging innovation while maintaining regulatory control.

Whether the city fully embraces decentralized models remains to be seen, but one thing is clear: financial market integration is shaping how digital assets fit into the broader economy, while the long-term impact on societal adoption remains uncertain.