HK may expand crypto rules
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The territory is “open and inclusive” to virtual asset companies, Hong Kong’s finance secretary told a fintech conference
Hong Kong is “back in business” and investigating whether to legalize crypto trading by retail investors, its finance chief announced yesterday, at the start of a week of conferences aimed at reviving the territory’s image.
Unlike China where crypto has been almost banned, Hong Kong is looking to relax regulations and bring back some of the business that has left.
Years of strict COVID-19 pandemic controls and a political crackdown have hammered Hong Kong’s economy and triggered an exodus of talent that authorities say they now want to reverse.
Photo: Reuters
A fintech conference opened yesterday and will be followed tomorrow by a finance summit with the participation of some of the world’s best bankers.
“Hong Kong is open and inclusive to the global community of innovators engaging in virtual asset businesses,” Hong Kong Finance Secretary Paul Chan (陳茂波) told delegates at the fintech conference.
“In very many ways, we’re telling the world that we’re back in business,” he said, in a speech that had to be delivered remotely after he caught COVID-19 last week during an overseas trip.
In a new policy statement, the government said it would launch a consultation to explore how the retail segment “can be provided with an appropriate degree of access.”
It added that Hong Kong was willing to review “property rights for tokenized assets and the legality of smart contracts.”
Hong Kong limits exchanges to clients with portfolios of at least HK$8 million (US$1 million).
Expanding the permit to retail investors will allow far more ordinary citizens to invest in cryptocurrencies and virtual assets, but it comes with its own risks.
There has been a global push to regulate the crypto market and protect investors after wild swings and a series of high-profile collapses.
Critics say crypto is an ideal tool for generating investment bubbles, hiding illicit wealth and enabling fraud. China, once one of the world’s largest crypto markets, banned digital currency transactions last year.
Singapore has recently tightened regulations around retail transactions after a number of crypto exchanges imploded, including in the city-state, while Japan has recently relaxed some of its more conservative rules for listing tokens. Given its position as a gateway for China to international markets, Hong Kong was initially something of a crypto hub.
The territory then introduced a voluntary licensing regime in 2018 for major exchanges, but only two were approved for permits: BC Technology Group Co (品品中國集團) and HashKey Group.
One of the biggest exchanges that used to be in Hong Kong, FTX Trading, moved to the Bahamas last year.
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