Hong Kong may be opening its doors to cryptocurrency businesses in an effort to establish itself as a global centre for the industry, but it has no plans to relax its laws on digital assets. In fact, weeks before the implementation of a new licensing system, a top official issued a warning that the rules “will be tight.”
“Our regulations will be tight,” Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue Wai-man said at the Bloomberg Wealth Asia Summit this week, according to the outlet.
“We will let the industry develop and innovate. We will let them create the ecosystem here, and that actually brings a lot of excitement,” the executive noted before adding, “But that doesn’t mean light-touch regulation.”
Platforms for cryptocurrency exchanges will be permitted to start providing their services to normal customers in the nation on June 1. This is in accordance with the new licensing system, whose rules should be made public later this month.
The rules, which were expected to offer support and a framework for cryptocurrency trading platforms aiming to start their trading services in China’s Special Administrative Region, were announced last month by SFC CEO Julia Leung to be released in May.
Yue claims that Hong Kong has recently had very strict restrictions regarding cryptocurrencies. The executive strongly declared that the city-state would never permit an FTX-like event, although these have already been lowered to a much lower, “reasonable and sustainable level.”
Additionally, according to the de facto central bank of the city-state, the HKMA is preparing for an obligatory licensing framework for stablecoin-related businesses that may be available by 2024.
FinTech Association of Hong Kong (FTAHK) Chairman Niel Tan said during the March Hong Kong WOW Summit that the licensing regime that would start in June would also include retail. He said that Hong Kong was “moving forward” as a result of the city-state’s decision to permit crypto retail trade, as opposed to Singapore and the United States, which both appeared to be moving backward in terms of crypto retail.
“If there’s access to [crypto] in a legal and regulated way, then I’m sure participants will come. It is a ‘build it and they will come’ because there are no other options. The options are dwindling, actually,” Tan said, adding that both China and Hong Kong recognized talent and tried to do something to support it.
“There’s a lot of talent across the border and right now there’s a fair amount of unemployment,” Tan said about China at the time. “There’s a lot of talent that’s coming from Big Tech and so forth that’s able to come into Hong Kong.”
- Published By Team Hongkong Journalist