Recently, Hong Kong’s government announced that they will in hong kong to regulate cryptocurrency trading through a licensing system. Propose amendments to the as well as Anti-Money Laundering and Counter-Terrorism Financing Bill, crypto exchanges will be deem “regulated virtual asset activities”. Anyone wishing to engage in crypto exchange work must be license by the Securities and Futures Commission. Hong Kong’s financial regulators restricted retail investors’ access to digital assets in January.
Hong Kong’s central banking agency has indicate that the new regulations will be aim at ensuring the protection of local investors. As well as comprehensive rules as well as for authorized institutions. Hong Kong is not as advanced as Singapore, it is still eager to follow. Singapore’s example and become a cryptocurrency hub. However, the regulations are likely as well as to limit the number of companies that can operate. In Hong Kong and provide a safe haven for investors.
Regulate Cryptocurrency Trading
To start the regulation, the SFC will need to make it easier to regulate the trading of cryptos. The SFC’s proposed regulation will impose restrictions on “retail” cryptocurrency spot ETFs. The regulations will still allow professional investors to participate in crypto exchanges, but will restrict the sale of virtual assets to non-professionals. However, the Hong Kong Securities and Futures Commission (SFC) has previously said that the regulation is not yet a sufficient measure to protect investors. Hong Kong to regulate cryptocurrency trading.
In addition to regulating cryptocurrencies,as well as Hong Kong’s top financial watchdog, the SFC, will also be regulating cryptocurrency exchanges. The current opt-in regulatory regime only applies to platforms that trade securities or futures contracts. But, the Hong Kong government recently announced plans to expand the scope of these regulations to include VASPs. Hong Kong’s SFC announced a consultation period on the proposed regulatory framework for cryptocurrency businesses that ended on the 31st of January 2021.
Hong Kong is makes strides
It is makes strides to ensure that the local crypto ecosystem is not regulate by foreign entities. This is a key step in making Hong Kong a global hub for cryptocurrency trading. The SFC is a pioneer in securities regulation, its recent license for virtual asset service providers indicates. Hong Kong is a world leader in this industry. If the regulatory regime does pass, Hong Kong’s role in the crypto industry will be well-position to handle the inevitable disruptions in the future.
The HKMA is attempting to avoid regulatory arbitrage by collaborating with other financial regulators in the region. While this is a difficult task, it is necessary for Hong Kong to protect the public from a possible scam. HKMA has made it clear that it will be in a position to regulate cryptocurrency trading once the industry matures. That means that the Hong Kong market will be regulate in a manner that prevents a potential financial crisis.
There are several issues with the Hong Kong government’s current policy regarding cryptocurrency trading. While the current framework does not apply to cryptocurrency exchanges, it does not apply to stablecoins. In most cases, stablecoins are issue by a central issuer, which sells and redeems them for fiat currency backing. Activities would likely fall under the supervision of the Hong Kong Monetary Authority (HKMA), which administers the Stored Value Facility.