Hong Kong is making moves to legalize the trading of cryptocurrencies in the country as part of its effort to become a crypto hub in the Asia-Pacific region despite China’s outright ban on the asset class.
Hong Kong to Open its Doors to Crypto Exchanges
According to a press release issued by the country’s Financial Services and Treasury Bureau on the development of virtual assets, Hong Kong plans to introduce a comprehensive regulatory framework to reduce risk exposure associated with trading the assets.
“We will put in place timely and necessary guardrails to mitigate actual and potential risks in line with international standards so that VA innovations can thrive in Hong Kong in a sustainable manner,” the authorities said.
With the regulatory measures in place, the country will also allow international digital asset service providers (DSPs) to provide their entire suite of product offerings to their customers in the region by issuing authorized licenses in compliance with the local rules.
Last year, the government received 79 submissions on a proposal seeking to legally license crypto exchanges and other trading platforms to operate in the jurisdiction.
The proposed law, which is currently being reviewed by the legislative council, gives the Securities and Futures Commission (SFC) authority to police the companies offering such services to combat money laundering activities.
Hong Kong Plans to Introduce Crypto ETFs
The country said it intends to work with the SFC to investigate how investors could interact with the ETFs.
The country also plans to delve into other areas of the industry, including the non-fungible tokens (NFTs) market. The government is also working with regulators to explore other pilot projects across the industry and the Web 3 ecosystem.
“We recognize the potential of DLT and Web 3.0 to become the future of finance and commerce, and under proper regulation, they are expected to enhance efficiency and transparency. The Government is prepared to embrace this future, and we welcome the clustering of the Fintech and VA communities and talents in Hong Kong,” said Christopher Hui, the Secretary for Financial Services and the Treasury.
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