Positive crypto signs from the UK and Hong Kong: Who is the new crypto hub?
The UK has a new pro-crypto PM and a new name for stablecoins
On the point of the news about the vote to recognize cryptos as regulated financial instruments, Bitcoin just increased to $21,170. This is in line with the new crypto development in the UK market. As part of the Financial Services and Markets Bill, the UK House of Commons, the lower house of parliament, agreed on Tuesday to regulate cryptocurrency assets as financial instruments. The House of Lords, the upper house, will vote on the bill before it becomes law. This comes as Rishi Sunak, who was named the country’s next prime minister on Monday, has a history of supporting cryptocurrencies.
The local cryptocurrency sector, which recently celebrated Rishi Sunak’s election as the country’s new prime minister, is likely to applaud moves to give legal legitimacy to digital assets. When Sunak served as Chancellor of the Exchequer in the Boris Johnson administration, he introduced the Markets Bill, which indirectly led to the stablecoin regulations.
The bill expands on current stablecoin regulatory provisions and uses the term “Digital Settlement Assets” (DSA) instead of “crypto assets,” moving away from the use of the term “crypto assets.” Stablecoins focused on payments that are cryptocurrencies tied to the value of other assets such as the US dollar or gold were already covered by elements of the bill that would have extended existing restrictions to them.
According to Griffith, the finance minister and the city minister, the crypto provision clarifies that crypto assets can be brought within the scope of the existing provisions of the Financial Services and Markets Act 2000 relating to regulated financial business. The crypto provision depends on the definition of “crypto asset” inserted by a new section 14. The regulation could control cryptocurrency advertising and ban businesses that are not allowed to operate across the country.
“The Treasury will consult on its approach with industry and stakeholders before using the power to ensure the framework reflects the unique benefits and risks posed by crypto activities,” Griffith said. He added: “The Treasury will consult on its approach with industry and stakeholders before using the power to ensure the framework reflects the unique benefits and risks posed by crypto activities.”
The Crypto and Digital Assets All Party Parliamentary Group (APPG) provides a forum for parliamentarians, regulators and the UK government to discuss challenges and opportunities relating to the crypto sector. This group, led by Scottish National Party Member of Parliament (MP) Lisa Cameron, has issued a written statement to the media seeking regulatory clarity and business certainty. “UK crypto and digital asset firms desperately need clarity on the UK’s approach to crypto policy and for the government to deliver on its vision for the UK crypto sector,” Cameron said in the statement.
The legalization of cryptocurrencies and digital assets as financial instruments is still under consideration. Key requirements that must be met for the bill include: Before the bill receives final royal assent from the next king, King Charles III, the House of Lords must accept or amend it.
The UK government can ensure financial stability and strong regulatory standards by recognizing the promise of this technology and regulating it now, so that these new technologies can be used reliably and safely in the future.
Hong Kong wants to be positioned as a crypto hub, while Singapore pivots
A few years back, Hong Kong was on track to become a crypto hub. Then Hong Kong’s regulator, the Securities Futures Commission (SFC), came knocking. Exchanges were questioned about the listing of tokens that acted like securities and also issued warnings about high leverage.
Fast forward to 2022, on October 31st, the Hong Kong government is investigating the legalization of retail crypto trading. Finance Minister Paul Chan announced in a keynote speech at the Hong Kong Fintech Week conference that the government would launch a consultation process to provide retail investors with “an appropriate level of access” to virtual assets. “We want to make our policy stance clear to the global market, to demonstrate our willingness to explore fintech with the global virtual resource community,” he added.
In contrast, Singapore significantly restricts access to cryptocurrencies for individual investors after last year’s market collapse brought down several digital asset companies linked to the Southeast Asian country and caused much greater losses across the industry. If you remember, many of the bigger crypto companies moved from Singapore to Dubai and now the same thing is happening again. Hong Kong looks set to be the next hotspot for digital asset companies, entrepreneurs and investments.
Even the head of the central bank, Ravi Menon, admitted in a Bloomberg Television interview that some crypto companies with a retail concentration would leave the city-state, saying bluntly: “We wish them well.”
Cryptocurrencies “play a supporting role in the wider digital asset ecosystem and it would not be possible to ban them,” the Monetary Authority of Singapore (MAS) stated in a media statement. Singapore’s stance is very solid and has made it clear that they are not banning cryptocurrencies and are working to reduce risk.
Positive signs
I see all these as positive signs. Singapore plans ahead. Hong Kong leaves some space ahead. The UK’s plan is ambitious. Hong Kong seems to be walking a different path than China which has completely banned cryptocurrencies. People on the ground are now speculating that Hong Kong could be the outflow channel for the Chinese to start trading cryptocurrencies again.
The recognition of cryptocurrencies under proper regulations would go a long way. I am optimistic about the results. #anndylian
