HK Web3 Feastival Roundtable: Balancing Regulation and Innovation to Build a Sustainable Asian Digital Financial Ecosystem

ChainCatcher onsite report: Li Guoquan, President of the Global FinTech Institute; Qiu Dagen, a Hong Kong Legislative Council Member (Tech Innovation Sector); Chen Siyuan, Chief Public Mission Officer of Hong Kong Cyberport Management Company; and Japan Virtual Currency Exchange Association (JVCEA) & Japan Cryptocurrency Business Association Executive Director Ko Masa jointly attended the HK Web3 Feastival roundtable meeting, discussing “the balance between regulation and innovation, and building a sustainable Asian digital financial ecosystem.”

Qiu Dagen said that the legislative process has been fully advanced. Next, he would like to see more innovation-driven efforts—how to make room for new products and new business models while improving the regulatory framework. He took the American bill’s startup exemption mechanism as an example, emphasizing that the soil for innovation is equally important. He also pointed out that Hong Kong’s stock market currently does not allow a market maker system, and the rules on liquidity provision in virtual asset trading will be covered in legislative discussions within the year. Regarding prediction markets, he personally believes Hong Kong does not yet have the conditions to open up.

Chen Siyuan introduced that last year Cyberport launched a blockchain and digital asset pilot subsidy program, with nine projects participating, more than half of which involve RWA tokenization. The goal is to move projects from proof of concept to commercialization. He said Cyberport has brought together more than 300 Web3 companies from 19 countries and regions, and emphasized that a trusted digital identity (KYC/AML compliance) is the foundation for scaling RWA and payments projects. He added that secondary-market liquidity determines whether tokenized assets can become real market products.

Ko Masa revealed that on April 10, Japan’s Financial Services Agency (FSA) submitted a new bill to the Diet to regulate crypto assets by moving them from the Financial Services Act to the Financial Instruments and Exchange Act. This means the government has formally recognized the investment attributes of crypto assets, a major shift. He also noted that in the past, Japan’s strict regulation led to more than 200 companies relocating to places such as Singapore. In recent times, by adjusting corporate tax regimes and discussing personal crypto tax reforms, companies are gradually returning.

Summarizing, moderator Li Guoquan said that Asian jurisdictions are not competitors but parts of the same ecosystem. If compliance costs are too high, they may push high-quality institutions into the gray area. How to lower compliance barriers through regulatory dialogue and promote responsible innovation is a common challenge facing the Asian digital financial ecosystem.