Hong Kong Veers Away From China, Plans to Legalize Retail Crypto
Hong Kong is taking steps to reassure businesses that the city’s official stance on cryptocurrencies is distinct from that of mainland China, and it is now considering allowing exchanges and other intermediaries to sell directly to retail investors as part of its efforts to reintroduce fintech businesses.
According to sources familiar with the situation who told Bloomberg, a planned obligatory licensing program for crypto platforms due to go into effect in March next year will allow retail trading. The city-state’s regulators want to allow bigger tokens to be listed but will not endorse specific coins like Bitcoin or Ether, adding that the details and schedule have yet to be decided because a public consultation is necessary first.
The “one country, two systems… forms the basic foundation to Hong Kong’s financial markets”, Elizabeth Wong, director of licensing and head of the fintech unit of the Securities and Futures Commission (SFC), said during a panel discussion held by InvestHK on Monday.
The city’s ability to introduce its own measure to govern cryptocurrencies “shows just how separate Hong Kong is from the mainland,” she added.
The SFC is currently considering enabling ordinary investors to “directly invest in virtual assets,” marking a departure from the commission’s previous policy of restricting crypto trading on centralized exchanges to professional investors.
“We’ve had four years of experience in regulating this industry… We think that this may be actually a good time to really think carefully about whether we will continue with this professional investor-only requirement,” Wong explained.
Singapore, Hong Kong’s traditional competitor for financial services, was shaken by the crash and has tightened its digital-asset restrictions to limit retail trading. Singapore recommended a prohibition on leveraged retail token purchases earlier this week while China deemed the crypto sector essentially unlawful a year ago.
READ: Bitcoin Slides to Below $30K Amid Broader Market Sell-off, China Crypto Crackdown
The city government officials announced last week that the city will present a new policy statement on cryptocurrencies during the next Fintech Week to demonstrate its “vision of developing Hong Kong into an international virtual assets centre.” It will also make the city’s position on virtual assets “clear to global markets,” according to the Fintech Week organizers.
Hong Kong, once home to some of the world’s largest cryptocurrency platforms, has recently seen an exodus of connected enterprises, owing in part to the city’s tough Covid-19 travel control procedures.
The government has recently increased attempts to entice back fintech companies that have recently departed the city, therefore restoring its status as a bitcoin centre.
Information for this briefing was found via Bloomberg, South China Morning Post, and Yahoo. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
