Hong Kong aims to become a global hub, and thus, has planned to begin a discussion on legalizing cryptocurrency trading by individual investors as part of a more significant effort to rebuild the city’s reputation as a financial center.
On Monday, the government announced that the consultation would discuss how the retail sector “may be allowed a reasonable degree of access.” The city said it was inviting international cryptocurrency exchanges to look into the business potential and possible efforts to create a new licensing scheme for virtual assets.
Under the general objective of “sustainable and responsible development” of the digital-token sector, Hong Kong stated that it is “open to the prospect” of listing cryptocurrency exchange-traded funds.
Financial Secretary Paul Chan said that the policy statement “explains in detail our vision and approach, regulatory frameworks, opinions on investors’ exposures, and our pilot programs to embrace the technology benefits and financial innovations brought by virtual assets.”
In a different policy paper, Hong Kong stated that it “would be vigilant and cautious about the risks to retail investors” and that it will improve education and ensure the proper regulatory framework is in place.
According to a report from Bloomberg News, retail trading is expected to be permitted under a proposed obligatory licensing regime for cryptocurrency platforms. Exchanges are only permitted for clients with portfolios worth, at minimum, HK$8 million ($1 million) under the present voluntary crypto framework.
According to Yvonne Szeto, vice president at Worldpay from FIS, “a consistent framework for crypto legislation is vital and key to promoting institutional and retail usage of digital assets at scale.” She continued by saying she approves of the course Hong Kong is taking.
Hong Kong also stated that it is willing to look into “property rights for tokenized assets and the legitimacy of smart contracts”.
Looking back, large exchanges like Binance and FTX once had their headquarters in Hong Kong; however, they moved base to China soon after. The policy changes could attract these big names back to HK.
Business Leaders Express Support
The new strategy for digital tokens was introduced at the Hong Kong FinTech Week.
Yat Siu, the chairman of Animoca Brands Corp., and Sam Bankman-Fried, the chief executive officer of cryptocurrency exchange FTX, both participated in person/by video.
It’s “clearly not too late,” according to Bankman-Fried, referencing Hong Kong’s efforts to catch up to, and even lead the way, in virtual asset regulation.
According to Adrian Wang, CEO of cryptocurrency brokerage Metapha, “this is a great move since it sends out a strong statement that Hong Kong is taking a different strategy to regulate its capital market.”
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Source: https://coinpedia.org/regulations/hong-kong-bounces-back-plans-to-legalize-crypto-trading/