Hong Kong reassures crypto businesses and investors

Hong Kong is to reconsider its crypto trading requirements in order to try and differentiate from China’s all-out ban. Its securities regulator wants to allow investors to directly invest in virtual assets.

Following a mass exodus of crypto businesses and the entrepreneurial talent that built and ran them, Hong Kong has now decided to woo talent and investment from the crypto industry back onto the islands.

Hong Kong has always had a financial market that has had much autonomy from the mainland even since China regained authority of the islands from Great Britain in 1997.

Hong Kong wants to differentiate from China

As reported by the South China Morning Post, Elizabeth Wong, director of licensing and head of the fintech unit of the Securities and Futures Commission (SFC) said in a panel discussion held by InvestHK that:

“one country, two systems” principle “forms the basic foundation to Hong Kong’s financial markets”

Up to this point the SFC has imposed restrictions on crypto traders similar to the U.S. “accredited investor status” of the traditional finance system. This limited the trading on exchanges in Hong Kong to “professional investors” who had a portfolio of at least HK$8 million (US$1 million).

While saying that the crypto industry had become more compliant Wong acknowledged that much thought should be put to whether the regulations should change to widen out access to crypto trading.

“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,”

A realisation of harm done

Given the Chinese government’s heavy handed approach towards cryptocurrencies in the mainland, Hong Kong crypto-related stocks have suffered badly, and many involved in the industry moved overseas if they had the chance.

However, it does appear that Hong Kong is starting to realise the significance of the talent exodus and is thinking more deeply about how to attract it back. Whether the Chinese authorities tolerate this position, when it is trying to impose central bank digital currencies on its population is more food for thought.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: https://cryptodaily.co.uk/2022/10/hong-kong-reassures-crypto-businesses-and-investors