Hong Kong’s crypto ambition gets subtle nods from Beijing: Report

Hong Kong’s ambition to become a cryptocurrency hub is reportedly seeing subtle support from the Chinese government, in what could be seen as a contrast to the mainland’s hardline anti-crypto stance.

In October of last year, the Hong Kong government floated the idea of ​​introducing a separate bill to regulate crypto and allow retail investors to “directly invest in virtual assets” that could potentially defy China’s sweeping crypto ban.

Beijing officials have not been adamant about the idea, according to people familiar with the matter. According to a February 20 Bloomberg report, representatives from China’s Liaison Office are understood to have visited crypto collections in Hong Kong to find out what’s going on.

So far, their meetings with Beijing officials on the matter have been amicable, according to the people in the know, which is perceived by local crypto business operators that Beijing – albeit very subtly – may be open to using Hong Kong as a test bed for crypto.

Hong Kong is a special administrative region of China, which allows the country to have its own laws and governance. The former British colony was transferred back to China in 1997 following a guarantee from Beijing that there would be no Chinese interference in the region’s economic and political systems for 50 years, known as the “one country, two systems” principle.

National People’s Congress member and digital asset lawyer Nick Chan was quoted as saying that as long as there is no violation of the “bottom line, so as not to threaten the financial stability of China”, then the city is free to undertake its own pursuits .

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On February 20, Hong Kong’s Securities and Futures Commission outlined a new crypto licensing regime that proposed that all centralized exchanges operating in the region must be licensed by the regulator.

It also proposed giving retail traders access to licensed cryptocurrency trading platforms, saying public feedback highlighted that denying access to crypto markets could push Hongkongers to trade on unregulated overseas platforms.

The new regulatory pressure has spurred many crypto businesses to seek expansion into the city. Most recently, exchange Huobi Global said it would seek a local license and plans to open a new Hong Kong exchange focusing on institutional and high net worth.