From June 1st, crypto exchanges in Hong Kong will be allowed to offer services to regular customers after the government introduced a licensing system. A senior official has recently stated that Hong Kong aims to establish itself as a global hub for the virtual assets industry.
This statement comes shortly before implementation of new licensing regulations for crypto exchanges. Additionally, the authorities are keen to revive Hong Kong as a contemporary financial hub following the departure of numerous IT experts to other nations due to the COVID-19 pandemic.
As per reports, Eddie Yue, the head of the Hong Kong Monetary Authority (HKMA), has confirmed that the city is set to launch a licensing system for crypto exchanges and other blockchain start-ups.
This action aims to establish a favorable atmosphere for expanding the cryptocurrency ecosystem in Hong Kong. At Tuesday’s Bloomberg Wealth Asia Summit, Yue emphasized that the regulations governing the crypto industry in Hong Kong will meet the stand applied to the legacy financial industry.
Yue stated on Tuesday:
What we want to do in Hong Kong is to say that, hey, this trend will continue. Let’s put in the right regulatory framework in using the principle of same activity, same risk and same regulation.
Developing Guidance For Banks Dealing With Crypto Exchange Customers
Eddie Yue has announced that the Hong Kong Securities and Futures Commission (SFC) is developing guidance for banks to enable them to work with customers of crypto exchanges. Additionally, Yue has revealed that the SFC will soon unveil new regulations allowing individuals to invest in digital currencies.
In response to several major cryptocurrency industry crises in the past year, governments worldwide are implementing regulations for the industry. As a result of this trend, Hong Kong has become an appealing location for certain companies. One reason for this is the city’s recent declaration of its goal to establish itself as a hub for virtual assets on a global scale.
With its highly developed financial infrastructure and pro-business environment, Hong Kong offers a compelling option for crypto firms looking to establish themselves in a stable and supportive regulatory environment.
Hong Kong’s Securities and Futures Commission (SFC) proposed new regulations allowing retail investors to purchase tokens with significant market capitalizations, such as Bitcoin and Ether, on licensed virtual asset platforms in February.
The SFC, the city’s securities watchdog, outlined the new rules to establish a clear regulatory framework for crypto trading in Hong Kong.
Starting next month, all centralized virtual asset trading platforms that operate in Hong Kong or market their services to Hong Kong investors will need to be licensed by the regulator under the new rules.
Additionally, Hong Kong Monetary Authority (HKMA) plans to establish a mandatory licensing regime for stablecoin-related activities by 2024. The HKMA published a consultation paper on the topic in February, outlining its proposals and seeking stakeholder feedback.