Hong Kong Regulator Explores Tokenization to Transform Bond Market

China Sees Further Metaverse Development Through Nanjing City InitiativeNanjing City’s Jiangning district recently unveiled its ambitious plans for metaverse development as competition in China’s metaverse sector intensifies.Photo by 李 亨 on PexelsThree-year planThe district aims to lay the groundwork for blockchain-based applications by attracting 200 metaverse companies and generating an industry with an annual revenue of 20 billion yuan ($2.80 billion) by the end of 2025. That’s according to a three-year plan to accelerate metaverse development published by Jiangning district’s management committee on Saturday.To support this vision, Jiangning plans to foster collaboration between local enterprises and academic institutions, with the goal of training 10,000 metaverse professionals over the next three years.Metaverse roadmapThe district’s comprehensive roadmap includes the identification of key metaverse technologies, such as blockchain, artificial intelligence (AI), and virtual reality. Additionally, the plan outlines the establishment of 50 research centers and laboratories dedicated to these areas of expertise.These initiatives were unveiled during a joint summit on metaverse and artificial intelligence-generated content (AIGC) held at the Jiangning High-tech Development Zone, a specialized industrial park known for its focus on life sciences, software development, and equipment manufacturing.At the summit, 16 metaverse-related projects were introduced, representing a total investment of 8.1 billion yuan ($1.13 billion). These projects encompass diverse fields, including A.I., cloud computing, big data, and healthcare. Jiangning’s commitment to the metaverse extends beyond the recently announced plan, as the district has been offering financial incentives to metaverse companies since May 2022.Moreover, an investment of 800 million yuan ($112 million) has been allocated to construct a dedicated “metaverse industrial building” that will provide office spaces for metaverse enterprises.Jiangning’s efforts contribute to Nanjing City’s broader aspiration of becoming a prominent metaverse hub in China. In February of this year, Nanjing unveiled its metaverse strategy and set the ambitious target of establishing an industry generating over 135 billion yuan ($19.13 billion) in annual revenues by the end of 2025. Additionally, Nanjing launched “the Blockchain Technology and Application Innovation Platform of China” in May, aimed at promoting and advancing metaverse research nationwide.Broader Chinese metaverse strategyWhile Nanjing is moving towards metaverse development, other Chinese metropolises, including Beijing, Shanghai, and Hangzhou, are also vying for dominance. Cities such as Zhengzhou and Suzhou are also endeavoring to participate in the trending technology.Last month, Zhengzhou announced a set of policy proposals aimed at supporting metaverse-centric enterprises locally. Earlier in May, the administrative body that governs Henan Province established a 150 million yuan ($21.7 million) private equity investment fund relative to the financing of metaverse-themed projects.As cities and regions in China compete to seize the opportunities presented by the metaverse, the country is witnessing significant investments and initiatives to establish a strong foothold in this transformative technology. Nanjing’s Jiangning district’s comprehensive plan and strategic partnerships signify the region’s dedication to becoming a flourishing metaverse ecosystem, while executing on a mandate from the central government to further develop metaverse technologies within China.

A Beijing-headquartered venture capital firm has invested $30 million in Hong Kong’s HashKey Exchange. That’s according to a report published by Bloomberg on Feb. 14, citing unnamed sources understood to be familiar with the matter. HashKey’s capital injection has come from Gaorong Ventures.  The Chinese VC firm was founded in 2014, initially known as Banyan Capital before rebranding as Gaorong Ventures in 2018. The VC firm focuses on early and growth-stage investments, with a specific interest in new technology.  Gaorong has 23 IPO portfolios on its books, together with 30 projects valued at in excess of $1 billion. It has been an early-stage investor in Chinese tech firms such as Chinese shopping platform Meituan and online retailer PDD Holdings.  Last year, the company participated in a funding round for Dongchedi, the car information and trading platform belonging to ByteDance, the parent company of TikTok.Photo by Towfiqu barbhuiya on UnsplashBeyond unicorn statusIn this instance, the funds were invested with HashKey Group weighing in with a post-money valuation in the region of $1.5 billion. That puts the company well beyond unicorn status, which it achieved in a previous $100 million funding round over a year ago. At that time, HashKey didn’t disclose the names of investors other than to state that they were “prominent institutional investors” and “leading Web3 institutions.” It’s understood that the round included both existing and new investors. Surging VC investment in crypto startups This latest investment comes amid a backdrop of a surge in venture capital investment into the crypto sector. Well-known American venture investors Sequoia Capital and Andreessen Horowitz (a16z) invested almost $1.2 billion in crypto projects last month.  In 2024, $13.7 billion was invested in crypto and blockchain startups by venture capital firms, marking a 28% increase on the previous year. In Q4 2024, the United States took first place, accounting for 46% of investment into startups across the market in general. Hong Kong weighed in with 17% in second place.HashKey is also playing its own role in crypto and blockchain startup investment. HashKey Exchange’s sister company, HashKey Capital, is an institutional asset manager that also invests in crypto startups. In recent weeks, the company has invested in SignalPlus, a crypto trading software firm focused on the Asian market, and Kelpr, a Cosmos (ATOM) ecosystem wallet project. More crypto VC investment in 2025In January, HashKey Capital CEO Deng Chao told Cointelegraph that he expected more VC capital investment in crypto startups in 2025. He stated: “As we enter into a supportive macro environment driven by stimulative US policies and the formalization of crypto regulatory frameworks, these macro tailwinds are set to drive more VC investments heading into 2025.” Meanwhile, the overarching HashKey Group is positive in its outlook with regard to the crypto and blockchain sector in 2025. Last month, it outlined that it expects Bitcoin and Ethereum to surge in price, the share of the market held by decentralized exchanges (DEXs) to increase, capital inflows into the sector from institutions to grow, the approval of more crypto ETFs and further development of layer-2 networks over the course of the year.

Analysts expect crypto market cap to triple or more next yearThe Korbit Research Center, affiliated with South Korean cryptocurrency exchange Korbit, published a report last Friday that provides projections for the crypto market in 2024.The paper includes contributions from its team, notably head of research Peter Chung, as well as research analysts Choy Yoon-young, Kang Dong-hyun and Kim Min-seung.Peter Chung predicts that the total market capitalization of cryptocurrencies could soar to $5 trillion, more than three times greater than its current level of $1.6 trillion. He attributes this potential growth to three key factors: the possibility of the U.S. Federal Reserve easing its monetary policy, the potential approval of spot bitcoin and ether exchange-traded funds (ETFs), and the anticipated Bitcoin halving event expected in April 2024.Photo by Pierre Borthiry — Peiobty on UnsplashFactors driving crypto market growth in 2024Peter Chung suggests that the growth of the crypto market will be driven by the expanding utility of virtual assets. He believes that once ETFs for bitcoin and ether are approved, these cryptocurrencies will become more versatile as investment options. This, in turn, is expected to enhance their reputation and foster wider adoption, having a significant influence on the broader crypto ecosystem beyond the two most dominant cryptocurrencies.Real-world assets and financial firmsChoy anticipates that the U.S. Securities and Exchange Commission (SEC) will approve spot bitcoin and ether ETFs by the first half of next year. On a different note, Kang focuses on the importance of blockchain technology, particularly emphasizing real-world assets (RWAs) and roll-up solutions. Kang highlights that since RWAs are closely linked with traditional financial institutions, an influx of capital from these entities is likely to boost the RWA market. This interaction between traditional finance and blockchain technology could be a key driver of growth in the sector.Regulatory changes and landscape shiftKim Min-seung, another analyst from the team, forecasts that upcoming regulatory developments could alter the dynamics of the cryptocurrency market. A notable development in this regard is the forthcoming implementation of the Virtual Asset User Protection Act in South Korea, set for July next year. According to Kim, these changes might result in a scenario where only competitive cryptocurrencies survive.Kim elaborates that the perception of virtual assets is poised for a shift. Currently, crypto investors tend to base their decisions on expectations of arbitrary cryptocurrency inflation. However, once new regulations are implemented, investors are likely to start assessing the actual value of virtual assets more critically. This shift in approach could lead to a more value-driven and stable cryptocurrency market, as speculative tendencies might decrease and a focus on intrinsic value increases.According to local news outlet website The Asia Business Daily, Peter Chung anticipates further growth in the cryptocurrency market next year, following its rebound this year. He suggests that this growth trajectory will not only continue but also attract increased attention from the public.