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Hong Kong as a Fintech and Crypto hub

Hong Kong as a Fintech and Crypto hub

Explainers Essentials

28 Sep 2020

Hong Kong is considered one of the world’s best fintech hubs and consistently ranks among the top 10 compiled by global fintech reports. The city is home to at least 8 startups valued over US$1 billion including Airwallex, TNG, WeLab, Lalamove, GoGoVan, Klook and SenseTime Group. Hong Kong’s strategic location together with supportive regulations and major global players has contributed to the city’s status as a Fintech hub, attracting global investments which totaled US$374 million in 2019, up from US$188 in 2018.

The Fintech landscape in Hong Kong spans the full spectrum seen across the world. Ranging from B2B to B2C, there are numerous Fintech companies offering services in payments, remittances, big data, AI, Insurtech, Compliance, Regtech, blockchain and digital assets. There are many more players in the ecosystem that play a supportive role – critical to making any Fintech hub thrive – including associations, accelerators, innovation labs, VCs, facilitators and event organizers.

The government’s proactive and supportive approach has played a huge role in making that happen. As a global financial center, the focus on Fintech is nothing but a logical evolution of the city’s development going into the future as Fintech matures. In the 2018/19 budget, the Hong Kong government set aside HK$500 million for Fintech for the following five years. Today, the government has launched many initiatives, policies, and funding schemes. All to foster the healthy development of the Fintech sector.

Fintech adoption

But the picture wouldn’t be complete without users. Again, Hong Kong has the stats to boast about with a higher than average consumer Fintech adoption rate at 67%. Before Fintech, the city’s residents were already tuned into global stock and forex markets, trading in their spare time. The new wave of Fintech services has only expanded the pool making it easier for more people to connect to financial services in a way that makes sense to them.

Since the HKMA introduced the virtual banking licenses program a few years back, Hong Kong now has a wide selection of homegrown digital banks that offer complete banking services through mobile apps without having any branch offices. So far, it’s been an overwhelming success with some digital banks reporting over 10,000 new accounts created within days of launching the service.

Hong Kong Crypto City

Next to banking, there is also a wide selection of consumer apps for trading stock, forex and crypto markets. Particularly crypto trading as a sector within Fintech has long been part of the trading world in Hong Kong. The city is home to many of the world’s largest crypto exchanges including AAX, CryptoCom, Huobi, OKEX and TideBit. It has its own thriving Bitcoin Association, Ethereum community, Consenys regional headquarters, OTC trading desks, and many BTC and ETH ATMs.


Besides a consumer base that is already familiar with investing and putting capital to work in order to create more money, the open government stance towards crypto has been beneficial to the thriving crypto scene. It is quite easy to buy crypto from any of the regulated exchanges based in Hong Kong.

As an added benefit, Hong Kong does not tax capital gains which means buying and selling crypto does not result in complicated tax returns at the financial year-end. The same tax benefit applies to tapping into the rapidly evolving DeFi space, where finance is being taken to the next level using smart contracts and completely new concepts such as flash loans, no-loss lotteries and stablecoins.

Altogether, the Hong Kong consumer has a huge array of tools to manage money better and smarter. The digital bank account is just a few taps away, the global stock market is available for trading, and the crypto market is always open for business – all accessible from a mobile phone.

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AAX Trends focuses on market trends and analyzes essential events and factors in the cryptocurrency space. From DeFi, NFTs to GameFi and the metaverse, AAX has the answer to everything in the digital assets industry.

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