The virtual banks of Hong Kong, despite representing only a small part of the market, are determinedly exploring the potential of web3, facing regulatory challenges to expand their digital presence.

Let’s see all the details below. 

Opportunities in web3: the virtual banks of Hong Kong show digital ambitions

As anticipated, the virtual banks in Hong Kong are facing a crucial moment, with a currently limited market share, representing only 0.3% of the total assets of retail banks. 

However, the rapidly evolving context of web3 offers new opportunities for these financial institutions.

The legislator of Hong Kong, Johnny Ng Kit-chong, a well-known supporter of cryptocurrencies, believes that virtual banks can play a more significant role in serving businesses related to Web3.

According to Ng, the government of Hong Kong has already made significant progress in the field of virtual banks and in updating financial services. 

Ng sees the next two years as a critical period to strengthen the city’s contribution to the development of Web 3.0, one of the most promising emerging technologies.

One of the main difficulties that virtual banks in Hong Kong face is the complexity in opening accounts for companies operating in the cryptocurrency, non-fungible token (NFT), and blockchain sectors. 

A recent survey, reported by the South China Morning Post (SCMP), revealed that 40% of the companies interviewed consider this process “extremely complicated”. In particular, citing as main obstacles the localization and the “onerous standards”.

These difficulties have led some companies to move to more welcoming regions, risking to slow down digital innovation in Hong Kong.

Progress among the difficulties

Despite the challenges, Ng remains optimistic about the potential of virtual banks, emphasizing the importance of a clear government plan for the development of Web3. 

Mox Bank, owned by Standard Chartered, has already taken a step forward by launching a exchange-traded fund (ETF) of cryptocurrencies. Thus becoming the first virtual bank in Hong Kong to facilitate spot ETF transactions on Bitcoin and Ether.

Barbaros Uygun, CEO of Mox Bank, has announced the bank’s intention to further expand into emerging sectors, offering new digital investment opportunities to its clients.

In a context of growing interest in cryptocurrencies, Ng recently announced the intention to collaborate with various stakeholders to evaluate the inclusion of Bitcoin in the financial reserves of Hong Kong. 

Defining Bitcoin as “digital gold”, Ng highlighted its potential in protecting the economy from inflation, thanks to the growing recognition of the value of this asset on a global level. 

This move could represent a significant step towards the integration of cryptocurrencies into Hong Kong’s economy, provided that the right regulatory conditions are established.

ETF on Ether in Hong Kong 

August 5, 2024 marked a historic moment for Hong Kong’s cryptocurrency-linked ETFs, with a daily trading volume reaching approximately 44.56 million dollars. 

That is, the highest ever recorded since these financial products were launched. 

The spot ETFs on Bitcoin (BTC) and Ethereum (ETH) were introduced on April 30, 2024, as part of a complex regulatory framework developed to ensure investor protection and maintain market integrity. 

The Securities and Futures Commission (SFC) has authorized companies such as China Asset Management and HashKey Capital to manage these ETFs. Thus offering a regulated and secure option for investors interested in gaining exposure to digital assets.

The record trading volumes reflect the growing confidence of investors in spot ETFs on BTC and ETH and in the cryptocurrency market in general.

Currently, the spot ETF on BTC in Hong Kong manages 248.71 million dollars, while the spot ETF on ETH controls 37.48 million dollars of assets. 

We remind you that these ETFs use a in-kind creation model, which allows converting BTC and ETH into ETF shares, simplifying access to investments and improving liquidity.

The combination of a creation model in nature, which favors liquidity, and a rigorous regulatory framework, offers a guarantee of compliance for both retail and institutional investors. 

This approach places Hong Kong ETFs in a favorable position for future success, with the potential to become a benchmark for the regulation of crypto ETFs globally.

Rumble Kong League, the NFT collection dedicated to basketball, has announced a new partnership with Round 21, offering physical prizes.

Rumble Kong League NFT and Round 21 and the physical prizes

With a roundup of tweets, the celebrated 10,000 Rumble Kong League NFT collection has just announced its new partnership with Round 21, a web3-native sports lifestyle brand. 

Here are the first tweets: 

On Wednesday, August 17th, check your wallets. You’ll see a custom digital NFT basketball!

This custom NFT will match your exact Rumble Kong, transforming your Kong into their very own basketball!

If this wasn’t enough, we also have something else for you…

2/5 pic.twitter.com/25BgY0gUA3

— Rumble Kong League (@RumbleKongs) August 16, 2022

“We are super excited to announce a partnership with @weareround21, a fellow web3 basketball brand. To kick things off, we are releasing a digital airdrop for ALL our Kong holders! Let’s check out some of the benefits you’ll get from this partnership… On Wednesday, August 17th, check your wallets. You’ll see a custom digital NFT basketball! This custom NFT will match your exact Rumble Kong, transforming your Kong into their very own basketball! If this wasn’t enough, we also have something else for you…”.

The announcement goes on to describe the new prize up for grabs for Kong owners, namely a personalized digital ball that after 19/8 will give its owners the opportunity to be able to purchase the official RKL X physical basketball. 

This physical prize will have no use in the virtual city of Athlos, the metaverse of the Rumble Kong League. 

Rumble Kong League: the basketball NFT collection involves NBA players

The Rumble Kong League (RKL) is an NFT collection of 10,000 unique ERC721 tokens, each randomly assembled from a list of more than 100 hand-drawn traits, creating a unique-looking Kong-style basketball player.

Built to bring the exciting basketball games to web and mobile gaming, giving anyone a chance to compete for the title, the Rumble Kong League involves a number of NBA players. 

Some RKL collectors include famous NBA finalists Stephen Curry, Gary Payton II, Andre Iguodala and Damion Lee, and other stars such as Paul George, JaVale McGee, Hassan Whiteside, Cole Anthony, Josh Hart, Tyrese Haliburton and Malik Beasley.

The initial sale of these tokens took place in July 2021 and they sold out in the first week, generating over 2,000 holders. No more Kongs of the genesis will ever be minted again.

The latest news on Non-Fungible Tokens

Non-Fungible Token (NFT) projects continue to grow. In the last week alone, the likes of Lamborghini, Coca-Cola, and Samsung have been in the news for their projects. 

In particular, Lamborghini is collaborating with NFT PRO and INVNT.ATOM to take its supercars to places in space that the traveler can visit and discover, collecting new NFTs every month for eight months until March 2023. 

Samsung, on the other hand, has signed an MOU with six companies collaborating to build the Galaxy NFT ecosystem. 

And finally, Coca-Cola has given away new NFTs on Polygon to existing owners of its previous NFTs to celebrate the anniversary of International Friendship Day together.

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