Hong Kong was once a crypto hub in the Asian Continent but lost its glory to Singapore and Dubai owing to its strict stance on regulating crypto products. In recent days however, Hong Kong has taken a more friendly approach so as to attract the investors it lost to its Asian counterparts. Since then, the authority has made a series of steps in reclaiming it glory and these are highlighted in a previous article that can be found here. The city has a booming service industry that seeks to capitalize on the utilization of the blockchain and Web3 sector to facilitate its growth. In the recent past, the city’s governing authority has offered incentives and relaxed its regulations in a bid to accommodate more investors in the Web3 sector.
As of Thursday 30th March, a new venture capital fund has set out to raise $100 million in funds that will go towards facilitating Web3 startups in the city. The fund, ProDigital Future Fund, has already secured $30 million from major Asian Crypto investors including Golin International group and Sunwah Kingsway Capital Holdings. The fund is already in talks with other numerous financiers in the Crypto sector so as to onboard them onto the scheme that is geared towards creating a crypto power hub in the region. The fund is managed by Ben Ng and Curt Shi. The former is a general partner at a SAIF Partners, a private equity firm, while the later is a longtime tech investor.
The City has learnt from its past mistakes and is set to use the fund to capitalize of Web3 startups in Mainland China that are transitioning into the sector. This strategy could also capture other firms from across the globe which are experiencing turmoil due to harassment from regulators in their jurisdictions. In the US for instance, following the collapse of FTX and other numerous crypto firms, regulators have taken a strict approach that is undermining the concerned firms. These troubled firms could however find refuge in an ecosystem with more relaxed and friendly regulations in Hong Kong that could inform their decision to set base in the city.
The Hong Kong fund has already started financing some Web3 startups in their early stages as a gesture towards its commitment to the crypto sector. So far, the startups that have benefited from this venture capital fund include GigaSpace, a metaverse company, and One Future Football, a virtual digital football league in Australia. While advocating for the fund, one of the fund’s leaders, Curt Shi, has said that while the process of getting investors to give their money to the venture capital has been easy, getting them to invest in crypto products has experienced a lot of caution. He also added that the degree of openness and flexibility by Hong Kong authorities will last but the firm will still retain its presence in other regions globally including Europe, Australia, Singapore and the US.
Author’s sentiments
With banking institutions in Hong Kong offering financial services to crypto products, the alliance is set to attract many troubled firms across the globe to bank with institutions in the city. The availability of consistent funding from these institutions and venture capitals will set up a conducive ecosystem that might after all convince the firms to move to the city. That coupled with the fact that the Hong Kong authorities have committed to a meeting with over 80 crypto companies will substantially boost the city’s bid to become a global crypto hub, not just in Asia.
