The financial secretary said on Monday Hong Kong is committed to creating a promising and successful future for Web3, or third generation Internet, development.

Speaking at the Web3 Festival Hong Kong that has attracted thousands of participants from around the world, Paul Chan pointed out that Web3 allows transactions to be carried out more efficiently, at a lower cost and with enhanced market transparency.

"Hong Kong's approach to Web3 is not simply about regulation," Chan said.

"We aim to strike a balance, ensuring market integrity without stifling innovation.

"After all, innovation entails risks.

"The lesson we have learned is that we need to put it under a balanced regulatory framework so as to enable the sector to grow in a responsible and sustainable manner."

He pointed out that innovation is crucial to the development of Web3, and regulators should adopt a technology-neutral approach.

Chan added that the government is looking to work with innovators and entrepreneurs from around the world to promote Web3 development and leverage its power for the greater good.

He revealed that the Securities and Futures Commission has already issued licences to 10 virtual asset trading platforms.

The four-day event staged at the Hong Kong Convention and Exhibition Centre will conclude on Wednesday.