Hong Kong is stepping up its game in finance technology with new policy guidelines to integrate artificial intelligence (AI) in the financial sector and exploring tax breaks for virtual assets.
The new AI framework establishes a common approach for regulatory bodies across banking, securities, pensions, insurance, and audit, setting the stage for each sector to develop guidelines that promote responsible AI adoption.
"Hong Kong’s financial sector has what it takes to promote AI adoption—sizable markets and rich scenarios,” said Christopher Hui, secretary for Financial Services and the Treasury, during his keynote address at the annual Fintech Week.
This AI policy comes as Hong Kong navigates a complicated global environment marked by rapid technological changes and ongoing U.S.-China tech tensions. While the city’s consumers face restrictions accessing major U.S. AI services, Hong Kong has taken steps to boost its domestic AI development.
For instance, the Hong Kong University of Science and Technology plans to launch InvestLM, a homegrown language model tailored to local financial regulations.
Alongside AI initiatives, Hong Kong also proposed extending existing tax incentives to include virtual asset investments. Hui emphasized that the tax breaks for family offices and private funds would help the city tap into the fast-growing digital asset market, with legislation targeted for the end of the year. The move positions Hong Kong as a competitor to cities like Singapore in the regional digital finance landscape.
This will “further recognize its role for asset allocation,” Hui said.
