Hong Kong would not go crypto without China’s approval — Animoca exec
Hong Kong’s rapid adoption of cryptocurrencies and Web3 is a sign of some “big moves” happening in mainland China, a co-founder of the local game software firm Animoca believes.
The current crypto trend in Hong Kong is “not really just about” the city-state, but about wider China, despite mainland China banning crypto, according to Animoca co-founder Yat Siu.
Speaking at the Ethereum Community Conference (EthCC) on July 19, Siu mentioned that China released its Web3 white paper in May, in which the government “basically indicated that Web3 is the future of the internet.” It should not be underestimated that the news came just a few days after Hong Kong officially announced plans to allow retail crypto investments, the exec stressed.
Although China’s Web3 white paper did not mention crypto, it’s still important that mainland China is putting out a budget toward progressing with Web3, Siu said.
He claimed that the news about Hong Kong’s crypto developments was ubiquitous in China, including in a notice on the national TV channel, China Central Television.
“So every Chinese person basically in China got to see this,” Siu noted, adding:
“This is interesting because it’s not really just about what’s happening in Hong Kong. It’s really a message that’s coming from, you could say, high above. And Hong Kong wouldn’t do anything without the approval of China.”
In his keynote speech, Siu also argued that Web3 is a powerful tool to “push a new technology paradigm” away from the United States’ tech hegemony. He specifically referred to potentially detrimental security risks of nations’ dependence on tech giants like Google, Apple and Facebook, stating:
“That’s actually another big agenda item, which is why Japan, Korea, China, all these places are pushing Web3 in a really big way because they see that as an opportunity to break away from basically U.S.-dominant technologies.”
Siu went on to say that challenging the U.S. hegemony is particularly important for places like China, which is focused on de-dollarization.
“It’s another reason why Web3 is being pushed in these places. Less dependency on the dollar. The dollar is, of course, as we know, the global currency of the world,” Siu stated.
Related: Advocates call for Hong Kong govt stablecoin to compete with Tether and USD Coin
As previously reported by Cointelegraph, the People’s Bank of China officially announced another ban on virtually all crypto activity in September 2021. It’s worth noting, however, that mainland China remained one of the world’s largest crypto mining hubs even despite the ban.
With the news about Hong Kong proactively adopting crypto-friendly regulations, many crypto observers expressed hope that China could potentially lift its years-long ban on crypto.
However, several state-related executives, including CPIC Investment Management CEO Chenggang Zhou, have recently reiterated that China remains and will remain anti-crypto in the near future.
Magazine: Asia Express: China expands CBDC’s tentacles, Malaysia is HK’s new crypto rival
The legislation to establish crypto market structure is one of three bills the US House of Representatives is expected to consider starting next week.
The idea of a wealth tax has raised its head – yet again – as the government attempts to balance its books.
Downing Street refused to rule out a wealth tax after former Labour leader Lord Kinnock told Sky News he thinks the government should introduce one.
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Lord Kinnock calls for ‘wealth tax’
Sir Keir Starmer’s spokesman said: “The prime minister has repeatedly said those with the broadest shoulders should carry the largest burden.”
While there has never been a wealth tax in the UK, the notion was raised under Rishi Sunak after the COVID years – and rejected – and both Harold Wilson’s and James Callaghan’s Labour governments in the 1970s seriously considered implementing one.
Sky News looks at what a wealth tax is, how it could work in the UK, and which countries already have one.
Will Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer impose a wealth tax? Pic: PA
What is a wealth tax?
A wealth tax is aimed at reducing economic inequality to redistribute wealth and to raise revenue.
It is a direct levy on all, or most of, an individual’s, household’s or business’s total net wealth, rather than their income.
The tax typically includes the total market value of assets, including savings, investments, property and other forms of wealth – minus a person’s debts.
Unlike capital gains tax, which is paid when an asset is sold at a profit, a wealth tax is normally an annual charge based on the value of assets owned, even if they are not sold.
A one-off wealth tax, often used after major crises, could also be an option to raise a substantial amount of revenue in one go.
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Wealth tax would be a ‘mistake’
How could it work in the UK?
Advocates of a UK wealth tax, including Lord Kinnock, have proposed an annual 2% tax on wealth above £10m.
Wealth tax campaign group Tax Justice UK has calculated this would affect about 20,000 people – fewer than 0.04% of the population – and raise £24bn a year.
Because of how few people would pay it, Tax Justice says that would make it easy for HMRC to collect the tax.
The group proposes people self-declare asset values, backed up by a compliance team at HMRC who could have a register of assets.
Which countries have or have had a wealth tax?
In 1990, 12 OECD (Organisation for Economic Co-operation and Development) countries had a net wealth tax, but just four have one now: Colombia, Norway, Spain and Switzerland.
France and Italy levy wealth taxes on selected assets.
Colombia
Since 2023, residents in the South American country are subject to tax on their worldwide wealth, but can exclude the value of their household up to 509m pesos (£92,500).
The tax is progressive, ranging from a 0.5% rate to 1.5% for the most wealthy until next year, then 1% for the wealthiest from 2027.
Bogota in Colombia, which has a wealth tax
Norway
There is a 0.525% municipal wealth tax for individuals with net wealth exceeding 1.7m kroner (about £125,000) or 3.52m kroner (£256,000) for spouses.
Norway also has a state wealth tax of 0.475% based on assets exceeding a net capital tax basis of 1.7m kroner (£125,000) or 3.52m kroner (£256,000) for spouses, and 0.575% for net wealth in excess of 20.7m kroner (£1.5m).
Norway has both a municipal and state wealth tax. Pic: Reuters
The maximum combined wealth tax rate is 1.1%.
The Norwegian Labour coalition government also increased dividend tax to 20% in 2023, and with the wealth tax, it prompted about 80 affluent business owners, with an estimated net worth of £40bn, to leave Norway.
Spain
Residents in Spain have to pay a progressive wealth tax on worldwide assets, with a €700,000 (£600,000) tax free allowance per person in most areas and homes up to €300,000 (£250,000) tax exempt.
Madrid in Spain. More than 12,000 multimillionaires have left the country since a wealth tax was increased in 2022. Pic: Reuters
The progressive rate goes from 0.2% for taxable income for assets of €167,129 (£144,000) up to 3.5% for taxable income of €10.6m (£9.146m) and above.
It has been reported that more than 12,000 multimillionaires have left Spain since the government introduced the higher levy at the end of 2022.
Switzerland
All of the country’s cantons (districts) have a net wealth tax based on a person’s taxable net worth – different to total net worth.
Zurich is Switzerland’s wealthiest city, and has its own wealth tax, as do other Swiss cantons. Pic: Reuters
It takes into account the balance of an individual’s worldwide gross assets, including bank account balances, bonds, shares, life insurances, cars, boats, properties, paintings, jewellery – minus debts.
Switzerland also works on a progressive rate, ranging from 0.3% to 0.5%, with a relatively low starting point at which people are taxed on their wealth, such as 50,000 CHF (£46,200) in several cantons.
The Chinese owner of British Steel has held fresh talks with government officials in a bid to break the impasse over ministers’ determination not to compensate it for seizing control of the company.
Sky News has learnt that executives from Jingye Group met senior civil servants from the Department for Business and Trade (DBT) late last week to discuss ways to resolve the standoff.
Whitehall sources said the talks had been cordial, but that no meaningful progress had been made towards a resolution.
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Jingye wants the government to agree to pay it hundreds of millions of pounds for taking control of British Steel in April – a move triggered by the Chinese group’s preparations for the permanent closure of its blast furnaces in Scunthorpe.
Such a move would have cost thousands of jobs and ended Britain’s centuries-old ability to produce virgin steel.
Jingye had been in talks for months to seek £1bn in state aid to facilitate the Scunthorpe plant’s transition to greener steelmaking, but was offered just half that sum by ministers.
British Steel has not yet been formally nationalised, although that remains a probable outcome.
Jonathan Reynolds, the business secretary, has previously dismissed the idea of compensating Jingye, saying British Steel’s equity was essentially worthless.
Last month, he met his Chinese counterpart, where the issue of British Steel was discussed between the two governments in person for the first time.
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Inside the UK’s last blast furnaces
Jingye has hired the leading City law firm Linklaters to explore the recovery of hundreds of millions of pounds it invested in the Scunthorpe-based company before the government seized control of it.
News of last week’s meeting comes as British steelmakers face an anxious wait to learn whether their exports to the US face swingeing tariffs as part of US President Donald Trump’s trade war.
Sky News’s economics and data editor, Ed Conway, revealed this week that the UK would miss a White House-imposed deadline to agree a trade deal on steel and aluminium this week.
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Jingye declined to comment, while a spokesman for the Department for Business and Trade said: “We acted quickly to ensure the continued operations of the blast furnaces but recognise that securing British Steel’s long-term future requires private sector investment.
“We have not nationalised British Steel and are working closely with Jingye on options for the future, and we will continue work on determining the best long-term sustainable future for the site.”
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