After FTX, one of the largest cryptocurrency exchanges in the world, applied for bankruptcy protection on November 11, several related currency platforms in succession also faced the threat of bankruptcy at the same time. The market panic continued to spread, which made the cryptocurrency market suffer unprecedented impact and test, and also made investors wary of future related development.

According to the blog of the World Bank in April this year, as of the first half of 2021, the total amount of crypto assets has soared to $2.8 trillion in the past two years. Compared with Bitcoin (24%), the share of Ethercoin (40%) and Stable Currency (24%) has also gradually increased. These cryptocurrencies are part of the virtual asset ecology. Many parts of the world actively study their development strategies and regulatory systems to meet the development trend of virtual assets.

However, for virtual assets and financial technology (FinTech), many countries still take a cautious attitude of "crossing the river by feeling the stones". For example, Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS), in a speech in August this year, carefully explained that the authorities gave a green light to digital assets (service providers must have licenses), but they did not encourage the orientation of cryptocurrency speculation. Although their attitude was conservative, it was better to be clear; For another example, the Organization for Economic Cooperation and Development (OECD) released a virtual currency tax report at the beginning of last month. The current tax provisions of HSBC member states on virtual currency and crypto assets help promote the inclusion of crypto asset ecosystems into the norm.

At the same time, although encryption assets and basic technologies (such as blockchain) are expected to achieve financial innovation, they still pose a certain risk to global financial stability. The Mainland announced a ban on cryptocurrency trading last year to curb the otherwise active trading. But interestingly, even though the central government issued a ban, the related activities in the mainland are still quite active. According to the "The 2022 Global Crypto Adoption Index" published by the financial data analysis company Chainalysis in September, China returned to the top 10 of The Index (ranking 13th in 2021).

In fact, the connection between crypto assets and traditional financial system is getting closer and closer. Vikram Pandit, former CEO of Citibank, predicted that the traditional financial industry would compete in the emerging field of cryptocurrency in the next three years; According to Bloomberg, investment banks such as JPMorgan Chase and Bank of America are recruiting relevant talents on a large scale, reflecting that institutional investors are accelerating the acceptance of crypto assets, and Goldman Sachs has also begun to provide crypto currency futures trading.

The world is racing to develop virtual assets, and the "Policy Declaration on the Development of Virtual Assets in Hong Kong" released by the Hong Kong government at the end of October also shows the government's policy stance and guidelines to coordinate with the ecological development of Web 3.0, the meta universe and virtual assets in the future. In addition to clear and flexible development strategies and regulatory measures to help attract local and overseas companies to carry out relevant businesses in Hong Kong, we also need to take advantage of potential opportunities in surrounding markets.

According to the "2022 Global Cryptocurrency Adoption Index", among 154 countries, 4 ASEAN countries rank the top 20, including Vietnam (No. 1), the Philippines (No. 2), Thailand (No. 8) and Indonesia (No. 20). It can be seen that ASEAN has developed rapidly in virtual currency in recent years. If Hong Kong can seize the huge potential of the ASEAN market, export financial technology and smart city services to ASEAN, and help them develop virtual assets, it can also stimulate the development of Hong Kong's new economy, generate more high-quality new jobs and new types of work, let our young people play their strengths, and jointly build Hong Kong into an international virtual asset center.