Hong Kong has begun to implement regulations on artificial intelligence in the financial sector, as part of its broader plan to become a leader globally in Web3 technology and cryptocurrency.
Financial Services and the Treasury Bureau is preparing a framework for ensuring the ethical usage of AI in financial markets including trading, cryptocurrency, and banking.
Bloomberg reports that the industry’s stakeholders are providing feedback to help draft guidelines.
A spokesperson for the FSTB revealed that it is monitoring developments on an international level and will release a policy statement detailing its stance towards AI and financial markets in later this year.
The move is a result of rising geopolitical tensions in the United States with China. This has led companies such as OpenAI, Google Gemini and others to limit their services for Hong Kong.
The Special Administrative Region has responded by focusing its efforts on encouraging local adoption of AI technology to reduce the reliance on external tools.
Hong Kong FinTech Week is scheduled to begin on October 28, and the new AI regulation will be announced.
Hong Kong currently has guidelines for AI applications that are aimed at consumers.
These guidelines, which were introduced by Hong Kong Monetary Authority in August, address important areas, such as fairness, accountability, transparency and data privacy.
Hong Kong cautiously pushes towards Web3
Hong Kong, in addition to focusing on AI has also taken important steps to establish itself as the leading hub for Web3 technology and cryptocurrency.
To foster an environment of safety and transparency, the jurisdiction implemented policies that were supportive and clarified its regulations.
Hong Kong launched a scheme to license cryptocurrency trading platforms last year. This led to two exchanges being approved to provide services for both retail and institutional investors.
Originally, HashKey’s retail customers were only able to trade Bitcoin and Ethereum. However, HashKey now offers Chainlink’s LINK token and Avalanche AVAX.
Hong Kong regulators prefer cryptocurrencies that have a substantial market cap and are not involved in any legal dispute.
The crypto assets have to meet strict standards. These include legal clarity, market liquidity and transparency.
Hong Kong has demonstrated its commitment to innovation and investor protection through a rigorous regulatory framework.
Hong Kong Securities and Futures Commission has reiterated its high standards and warned exchanges that they may lose their licenses if issues are not addressed during inspections.
SFC stated that any platforms failing to rectify flagged concerns would be required by the SFC to cease operation.
Hong Kong has developed a comprehensive regulatory framework that reflects its strategic effort to strike a balance between technological progress and robust investor protection. This ensures a safe and innovative environment in both the AI and cryptocurrency sector.
As new information becomes available, this post Hong Kong launches AI regulation for Financial Markets in Push for Web3 Leadership may be updated.
