Hong Kong regulators have revealed plans to explore introducing the cryptocurrency sector to investors. According to a government read this morningThe Securities and Futures Commission (SFC) will launch a public consultation on allowing private investors to trade virtual assets (VA), and access cryptocurrencies through exchange-traded funds (ETFs) are also considered.
Financial Services and Finance Department said in a story,
“We are aware of the growing acceptance of VA as a vehicle for investment distribution by global investors, whether corporate or individual. The launch of these products in Hong Kong will provide a connection at between VA players and traditional financial institutions, offering investors well-designed products, thereby promoting the growth of the sector in our market.
The announcement came after senior officials discussed strategies to make Hong Kong a global hub for the digital assets sector.
What else can we expect from this?
According to some reports, the owners of major cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) are pushing to be listed on stock exchanges. Criteria such as the token’s market value, currency, and participation in third-party crypto tokens may be included in the listing guidelines. Gary Tiu, CEO of BC Technology Group, said,
“Introducing official licenses in Hong Kong is one of the most important things for regulators to do. They can’t shut down the needs of retail customers.
According to Hashkey’s Michel Lee, Hong Kong is in the process of establishing a full-fledged crypto organization, and token stocks and bonds will become more important in the future.
The SFC, Hong Kong’s central financial regulator, implemented a voluntary licensing system in 2018. It only allowed clients with a minimum of HK$8 million ($1 million) to use the platforms. cryptocurrency trading. However, due to strict restrictions, only two companies—BC Technology Group and Hashkey—were allowed to operate.
However, many people are skeptical about the new crypto-regulation. Leonhard Weese, Co-founder of the Bitcoin Association of Hong Kong, said,
“The kind of talk I’ve been talking about is that there’s always a fear that there’s going to be a very strict licensing process. Although they can serve the market directly, they are still not attractive or competitive in foreign platforms.
In another policy paper, Hong Kong regulators said they are wary of the risks cryptocurrencies pose to investors. They also improve knowledge and ensure that proper management practices are in place.
The government also said it is investigating pilot projects to determine whether the technology can be used to digitally transform assets. This includes the creation of NFTs, the tokenization of green bonds, and e-HKD.
Hong Kong and Crypto-law
Hong Kong used to be the world’s main entry point for trade with China, and in recent weeks, local officials declared there is a desire to establish the city as a global hub for virtual assets. Visitors to the fintech event received token tokens, issued as non-fungible currency, and this year’s theme was Web3 and the Metaverse.
Other governments around the world are testing their ways to regulate cryptocurrency-related businesses, but the city is one of the first to establish a legal licensing program for financial managers and exchanges that trade digital assets.