(Bloomberg) — Hong Kong presented its first policy guidelines dedicated to the use of AI in finance and launched a tax break for virtual assets, part of efforts to promote itself as a center of Asian business.
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On Monday, government officials touted a common framework through which different regulatory agencies could develop policies governing the use of AI, seen as critical to the future of finance and other sectors. They also proposed extending a tax break on ownership of digital assets such as cryptocurrencies, promising legislation by the end of the year.
Hong Kong wants to strengthen its reputation as a key center in Asia for financial services. He wants to win back investors who have fled the city’s markets amid heightened tensions between the United States and China, while embracing next-generation technologies, from crypto to AI.
“Hong Kong’s financial sector has what it takes to drive AI adoption: large markets and rich scenarios,” Financial Services and Treasury Secretary Christopher Hui said in a speech during Fintech Week, the city’s flagship annual industry event.
Bloomberg News previously reported on the planned AI policy announcement. The city recognizes the unique risks and opportunities brought by AI and will take a dual-track approach to promote development while addressing challenges, Hui said on Monday. Banking, securities, pensions, insurance and audit regulators will now issue their own circulars on regulating AI in the financial sector, Hui added.
Hong Kong’s decision comes as governments, businesses and consumers around the world grapple with the potential of AI. A complicating factor is that the city is in the middle of a growing technological conflict between the United States and China.
Many Hong Kong consumers cannot easily access some of the most popular AI services, such as OpenAI’s ChatGPT and Google’s Gemini, because US tech giants do not make them available locally. Meanwhile, accessing services from Chinese companies Baidu Inc. and ByteDance Ltd. is complicated, if not impossible. The city government attempted to address this challenge by developing its own AI.
Financial firms around the world are also exploring how AI could reshape their operations. Banks are advertising for AI talent and using new technologies for everything from reviewing customer portfolios to tracking down potential defaulters.