The budget proposal, released today (28th), includes mention of the digital economy. The “digital RMB” will expand its pilot program in Hong Kong, allowing citizens to easily open and use digital RMB wallets and increase their value through “Transfer Fast”. The government will establish a “Digital Enterprise Identity” platform, similar to the corporate version of “Smart Convenience”, which will allow businesses to securely and conveniently authenticate their identity and verify their signatures when using e-government services or conducting online transactions, eliminating cumbersome processes, saving time, and reducing human error. The budget for this project is approximately HK$300 million, with the aim of gradually launching it by the end of 2026.
The “Committee on the Development of the Digital Economy” has conducted in-depth research over the past two years on how to promote the development of the digital economy. The committee’s report covers recommendations in various areas, including promoting digital policies, strengthening digital infrastructure, promoting the secure flow and use of data, accelerating the pace of digital transformation for businesses, and nurturing talent. The Hong Kong government has commissioned an expert group to conduct in-depth research on how to build a good data trading ecosystem for Hong Kong, including the role of Hong Kong as a super-connector in data trading and the promotion of the formulation of international data trade rules.
The Hong Kong Monetary Authority (HKMA) completed the first phase of the “e-HKD” pilot program in October last year, studying various local retail use cases, such as programmable payments, offline payments, and tokenized deposits. The second phase of the trial is about to begin, further studying new use cases. Another key project, the “Multiple Central Bank Digital Currency Cross-border Network” (mBridge), has also made progress, with the first phase of services expected to be launched this year, becoming one of the world’s first projects to settle cross-border transactions for businesses using multiple central bank digital currencies.
In terms of promoting cross-border data flow, the Innovation and Technology Bureau and the National Internet Information Office launched a pilot arrangement for the “Guangdong-Hong Kong-Macao Greater Bay Area (Mainland China, Hong Kong) Personal Information Cross-border Flow Standard Contract” in December last year. The first phase invited the participation of the banking, credit reporting, and medical industries, and the industry’s response was very positive. The Hong Kong government will gradually expand convenience measures based on the implementation results of the first phase, allowing various industries in both regions to utilize higher liquidity cross-border data and provide more convenient cross-border services for citizens and businesses.
Regarding the Web3.0 ecosystem, Cyberport currently has more than 220 companies engaged in related technologies, including three unicorns. Cyberport held multiple promotional and educational activities last year, attracting more than 29,000 participants, and also launched a funding program to encourage companies to conduct proof-of-concept testing and accelerate the market application of related technologies. Network security and investor and consumer protection are crucial for the development of Web3.0. Following the principle of “same business, same risks, same rules,” the Securities and Futures Commission implemented a licensing regime for virtual asset trading platforms starting from June last year, allowing investors to trade on licensed platforms, which not only meets international standards but also provides protection for investors, making Hong Kong ahead of many major jurisdictions. To enhance protection for investors and consumers, the Hong Kong government is consulting on the regulation of over-the-counter trading services for virtual assets. The HKMA will launch a “sandbox” in the short term to allow institutions interested in issuing stablecoins to test the issuance process, business models, investor protection and risk management systems within a controlled scope, and communicate about future regulatory requirements.
The government will allocate HK$100 million from the Social Innovation and Entrepreneurship Development Fund to provide digital training courses and technical support projects for Hong Kong residents aged 60 or above in the next three years, enabling them to more easily integrate into the digital age and reap the benefits of digital technology. The first batch of projects is expected to start as early as the fourth quarter of this year, benefiting at least 50,000 elderly people. The Hong Kong government has also set up “Smart Convenience” registration service counters in Guangzhou, Shenzhen Qianhai, and Futian, and launched the first Hong Kong “Cross-boundary One-stop” self-service machine in Guangzhou, making it convenient for Hong Kong residents and businesses in the Greater Bay Area to use “Cross-boundary One-stop” services and register for “Smart Convenience”.
