Hong Kong launched a crypto tax breaks for virtual assets and released its first policy guidelines pertaining to the use of AI in finance as part of its efforts to position itself as an Asian business hub.

Government representatives praised a shared framework on Monday that would allow various regulatory bodies to develop policies controlling the application of AI, which is thought to be essential for the future of the financial industry and other industries. Along with pledging legislation before the end of the year, they also suggested extending a tax exemption on the holding of digital assets like cryptocurrency.

Hong Kong finance AI is eager to establish itself as the premier financial services hub in Asia. It embraces cutting-edge technology like AI and cryptocurrency in an effort to woo back investors who have left the city's markets due to increased US-Chinese tensions.

Secretary for Financial Services and the Treasury Christopher Hui stated in a keynote address during Fintec Week that Hong Kong's financial industry has the necessary resources to encourage the use of AI, including huge marketplaces and rich scenarios.

The anticipated unveiling of the AI finance policy was previously covered by Bloomberg News. Hui stated on Monday that the city will adopt a dual-track strategy to foster growth while tackling obstacles, acknowledging the distinct dangers and possibilities presented by AI. Hui noted that regulators in the banking, securities, and pension, insurance, and audit sectors would now issue their own circulars about AI regulations in the financial industry.

Hong Kong's action coincides with global governments, corporations, and consumers debating the possibilities of AI. The city's location directly in the center of a growing US-China technological dispute is one element making things more difficult.

Some of the most well-known AI services, like Google's Gemini and OpenAI's ChatGPT, are not readily accessible to many Hong Kong users as the US tech behemoths do not provide them locally. In the meantime, it is difficult or impossible to use services from Baidu Inc. and ByteDance Ltd. in China. By creating its own AI, the city's administration has tried to solve that problem.