DeFi Nomad: Hong Kong

So you want to be a DeFi Nomad?

When it comes to connecting the world beyond nations and countries, the internet has provided immense opportunities. And in a post-pandemic reality, an increasing number of people are harnessing the power of technology and decentralized finance(DeFi) to explore a nomadic way of working and living.

Welcome to DeFi Nomad, a series where we explore the transnational opportunities of DeFi. We’ll be taking you through countries around the world and discussing their attitudes toward crypto—including laws, restrictions, and regulations—so you can make more informed decisions about the capabilities of your assets as you move from place to place. From tax laws to the cost of living, DeFi Nomad will provide you with all the information so that you can make more informed decisions as you travel the world with crypto.

TL:DR

• Hong Kong is an attractive destination for DeFi nomads, with vibrant city life, world-class infrastructure, and a favorable tax climate
• The Hong Kong government has been generally supportive of the cryptocurrency and blockchain industry
• Crypto can be bought and traded in Hong Kong but is not recognized as legal tender
• Hong Kong does not impose any general taxes on the use or trading of crypto. However, profits generated from the sale, exchange, or use of cryptocurrency may be subject to income tax, profits tax, capital gains tax, and stamp duty depending on the individual’s residency status. asset space

Hong Kong

Hong Kong is a popular destination for DeFi nomads, as it offers a vibrant city life, access to world-class infrastructure, and a relatively favorable tax climate. With over 1.4 billion people in the country owning crypto and a crypto ownership rate of 21%, Hong Kong is said to be one of the most crypto-ready countries in the world.

Next stop, Asia’s world city? Here’s all you need to know:

Hong Kong is a Special Administrative Region of China and is one of the world’s most densely populated countries. A major financial hub, Hong Kong is known for its free market economy and its status as a global financial center. The city is also home to a growing number of cryptocurrency and blockchain startups.

Hong Kong has become a hotbed for ICO activity in recent years, with some companies raising millions of dollars through token sales. The city also supports several cryptocurrency exchanges, including Binance, OKCoin, and Huobi.

The Hong Kong government has been generally supportive of the cryptocurrency and blockchain industry. They have taken steps to ensure that cryptocurrency and blockchain-related activities are properly regulated and monitored, such as introducing the “Stored Value Facilities” regulatory framework and the “Virtual Assets Supervisory Guidelines” for cryptocurrency exchanges.

However, the government has also cracked down on ICOs, issuing a warning that they may be considered illegal securities offerings.

Despite the government’s crackdown on ICOs, the cryptocurrency and blockchain industry continues to thrive in Hong Kong. The city’s vibrant startup ecosystem and supportive government policies make it an ideal place for companies in the space to launch and grow.

Can you buy crypto in Hong Kong?

Yes, you can buy crypto in Hong Kong. Several exchanges offer crypto trading services to the public with a variety of different crypto offerings, ranging from the most popular such as Bitcoin and Ethereum to more niche coins. Additionally, some exchanges offer over-the-counter (OTC) services, allowing clients to purchase crypto directly from other traders. As Hong Kong is one of the most crypto-friendly countries in the world, it is a great place to start buying and trading crypto.

Is crypto recognized as a legal tender in Hong Kong?

Cryptocurrency is not recognized as a legal tender in Hong Kong. The Hong Kong Monetary Authority, the city’s de facto central bank, stated that “Bitcoin is not a legal tender in Hong Kong” and that it “does not regulate the trading of virtual commodities”. Despite this, several exchanges in Hong Kong allow the trading of cryptocurrencies, and cryptocurrencies are accepted by some merchants. However, the use of cryptocurrencies is not widespread in Hong Kong and there is no legal protection if traders suffer losses.

Crypto taxation laws in Hong Kong

Crypto taxation laws in Hong Kong are relatively easy to understand. The Inland Revenue Department (IRD) of Hong Kong does not consider cryptocurrencies to be legal tender and therefore does not impose any general taxes on their use or trading. However, profits generated from the sale, exchange, or use of cryptocurrency may be subject to income tax, profits tax, and stamp duty. Additionally, any gains made from investing in cryptocurrency may be subject to capital gains tax depending on the individual’s residency status. It is important to note that the taxation of cryptocurrency in Hong Kong depends on the individual’s residency status and activities in the digital asset space.

Our Verdict

Hong Kong is relatively considered crypto-friendly but could do better in terms of regulations. The government has yet to implement clear and concise regulations concerning cryptocurrency activities.

Hong Kong is considered to be an attractive jurisdiction due to its low taxation and offers a wide range of cryptocurrency-related services, including exchanges, payment processing, and merchant services, making it an ideal destination for a DeFi Nomad.

📊 MELD Score

The MELD Score is a rating system that provides guidance to DeFi Nomads to determine the capabilities of their crypto assets in any given country. The rating is based on a scale of 1 to 10, with 1 being the lowest and least crypto-friendly and 10 being the highest and most crypto-friendly. Factors such as crypto adoption rate, support, regulations, and crypto taxation laws are taken into account when arriving at a score.

Hong Kong rates 7.8/10 as a crypto-friendly destination

*This article is for informational purposes only and does not constitute legal or financial advice. The opinions expressed are those of the author and do not necessarily represent the views of the MELD LABS PTE. LTD. or the MELD FOUNDATION. All readers should do their due diligence and consult with a qualified professional when considering cryptocurrency regulations in a given country.

MELD — Be Your Own Bank

We think it’s essential for everyone to gain control of their financial lives and have equal access to financial instruments used by professionals, not just centralized institutions, governments, or the 1%. We want to provide financial freedom and control to the masses, including the unbanked.

We have a long-term goal to enable the $15 trillion that is currently locked out of the global economy, including 2 billion individuals worldwide that are either underbanked or have no access to banking services whatsoever, access these tools. These are the people that are paying the highest fees, and getting the worst customer service, and they are the ones that are having the most problems.

Our vision is to create an ecosystem that empowers individuals to regain financial control by providing them with the tools and services they need to manage their money on their terms. Whether that be creating a collateralized debt position (CDP) with cryptocurrency, earning an interest return for lending fiat to borrowers, or even participating in reward incentive programs, we strive to provide our users with the functions they need to manage their own financial lives.

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