Virtual Assets Report

CONCLUSION 29 Virtual assets are part of a global trend, with market revenues projected to reach US$80.80 billion in 2024.¹¹ As of July 2023, there were more than 2,700 registered VASPs across the globe, with Hong Kong accounting for 3.2% of the top 10 jurisdictions in VASP registrations.¹² Being crowned the best-prepared jurisdiction for widespread cryptocurrency adoption in 2022 and 2023 by the Worldwide Crypto Readiness Report, Hong Kong is also projected to achieve user penetration in the digital assets market of 18.9% in 2024.¹³ Moreover, Hong Kong’s vision for the development of a vibrant ecosystem for virtual assets and the government’s proactive approach to embracing opportunities in the sector provide much optimism in expanding the city’s virtual assets industry. As Hong Kong paves the way for more retail participation in virtual assets, mainstream investors’ interest in virtual assets will be a contributing factor in Hong Kong’s success in becoming a virtual assets hub. Although Hong Kong investors’ confidence in virtual assets may have been shaken by the JPEX incident of 2023, our study shows that the Hong Kong population’s perception of virtual assets is generally positive. Based on our findings, Hong Kong investors’ confidence in virtual assets can be restored if virtual assets and their service providers are properly regulated. Moreover, more public education is needed to equip investors with sufficient knowledge to make informed decisions about investments in virtual assets and reduce the likelihood of their being lured into investment scams. Collaborations among financial regulators, academic researchers and practitioners can facilitate proper regulation and cement Hong Kong’s role in the virtual asset industry. 11. Statista Market Insights (2023, August). Digital Assets – Worldwide. https://www.statista.com/outlook/fmo/digital- assets/worldwide 12. Confirm (2023, July). An Analysis of Global VASP Registration by Region. https://www.coinfirm.com/blog/vasp- registrations-global-analysis/ 13. Statista Market Insights (2023, August). Digital Assets – Hong Kong. https://www.statista.com/outlook/fmo/digital- assets/hong-kong CONCLUSION