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

ChainCatcher onsite report, Global FinTech Institute Dean Li Guoquan, Hong Kong Legislative Council Member (Technology Innovation Sector) Qiu Dagen, Chen Siyuan, Chief Public Mission Officer of Hong Kong Cyberport Management Company Limited, and Japan Virtual Currency Exchange Association (JVCEA) & Japan Crypto-Asset Business Association Executive Director Ko Masa, together attended the HK Web3 Festival 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 already been advanced to a great extent. The next step, he hopes, is to see innovation-driven development—how to make room for new products and new business models while improving the regulatory framework. He cited the startup exemption mechanism in U.S. legislation as an example, emphasizing that the “soil” for innovation is equally important. He also noted that Hong Kong’s stock market currently does not allow a market maker system, and that the rules for liquidity provision in virtual asset trading will be addressed in legislative discussions within the year. As for prediction markets, he personally believes that Hong Kong currently does not have the conditions to open up.

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

Ko Masa revealed that on April 10, Japan’s Financial Services Agency (FSA) submitted a new bill to the National Diet, proposing to shift the regulation of crypto assets from the Financial Services Act to the Financial Instruments and Exchange Act. This means the government officially recognizes the investment nature of crypto assets, which is a major shift. He also pointed out that Japan previously saw more than 200 companies relocate to places such as Singapore due to strict regulation. Recently, through measures such as adjusting the corporate tax system and discussing personal crypto tax reform, companies are gradually returning.

In his concluding remarks, host Li Guoquan summarized that Asian jurisdictions are not competitors but part of the same ecosystem. If compliance costs are too high, they may push high-quality institutions into the gray area. How to lower compliance thresholds through regulatory dialogue and promote responsible innovation is a common challenge for the Asian digital financial ecosystem.