As part of its efforts to establish itself as a centre for cryptocurrency, Bloomberg reported that Hong Kong is preparing to implement new regulations that would make retail cryptocurrency trading legal in the city.
However, the timeline for such a change has not been set in stone and is still up for public comment.
According to reports, the initiative, which is set to begin in March of next year, would require crypto platforms to obtain licences.
It happens as Hong Kong works to recover its status as a leading cryptocurrency hub after Covid-19, political unrest, and regulation dimmed the city’s image as a favourable location for cryptopreneurs to operate.
Speaking at a gathering, she stated that the SFC was trying to permit people to “directly invest into virtual assets” and that the government was considering its own crypto regulatory bill.
Elizabeth Wong, head of the fintech division at the Securities and Futures Commission (SFC), announced the decision last week to allow individual traders to again participate in the trading of digital assets.
The city was once a major hub for Asian cryptocurrencies, hosting companies like Binance and Sam Bankman-FTX. Fried’s
However, a voluntary licencing scheme put in place in 2018 essentially restricted institutional clients with portfolios worth at least HK$8 million ($1 million) from using cryptocurrency platforms.
Giving consumer-facing platforms the go-ahead could be the first step in regaining the trust of businesses that have recently stopped paying attention to Hong Kong. China is essential to Hong Kong’s cryptocurrency growth.
There are still uncertainties regarding the impact a laxer policy in Hong Kong would have on the sector in reference to mainland China.
In response to reports of Hong Kong’s “comeback” initiatives, BitMex co-founder Arthur Hayes said on his blog that access to Chinese consumers is essential to Hong Kong’s appeal to cryptocurrency businesses. We care about Hong Kong’s capacity to meet Chinese capital’s needs as cryptocurrency investors, he wrote. The Hong Kong economy is “powered by the average wealthy Chinese people, whether in retail purchases or capital flows.”
Additionally, he expressed concern over the possibility that China could use its influence over Hong Kong to undermine any pro-crypto measures. What guarantees are there that Beijing won’t reverse course and scrap all these advantageous crypto policies tomorrow?
But he continued by saying that he thought “China is for real” this time.
- Hong Kong may be essential to China’s return to cryptocurrency
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