Hong Kong comes up with regulations to become a crypto hub

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Key Takeaways:

  • Hong Kong seeks to regulate the cryptocurrency sector so innovative innovations can flourish.
  • Hong Kong officials and authorities are conducting various pilot projects to investigate the potential advantages of virtual assets.

Despite the current industry crisis brought on by the FTX collapse, the Hong Kong government is still committed to building out the infrastructure for cryptocurrencies.

Paul Chan, the financial secretary for Hong Kong, claims that in 2023, local regulators and the government will be willing to work with fintech and cryptocurrency startups.

Paul stated that Hong Kong has evolved into a foundation connecting high-quality virtual asset enterprises while speaking at an event organized by the government-run incubator Cyberport, according to a report from the public broadcaster Radio Television Hong Kong (RTHK) on Jan. 9.

The financial secretary claimed that during the last two months, companies involved in the cryptocurrency industry had requested the Hong Kong government to establish their worldwide headquarters there. Paul noted that several business organizations desired to increase their operations in Hong Kong or to list on regional markets.

The official claims that Hong Kong is making every effort to supervise the cryptocurrency market in an appropriate manner to unleash the potential of technologies like Web3.

He added that in December, Hong Kong’s legislature established legislation creating a licensing framework for companies that provide virtual asset services. The new regulatory framework is intended to give cryptocurrency exchanges the same level of market acceptance as the one that is currently in place for traditional financial institutions. Paul stated:

“We have recently completed the legislative work for licensing virtual asset service providers and the new measure will come into effect in June”

Chen allegedly mentioned several pilot projects being carried out by Hong Kong authorities and officials to examine the potential benefits of virtual assets and look into related uses during the event. He mentioned that one of the projects entails the Hong Kong government issuing tokenized green bonds for institutional investors to purchase.

Over the past year, Hong Kong has gradually reaffirmed its support for cryptocurrencies, positioning itself to overtake all other nations in the field by 2022.

Hong Kong introduced its first two exchange-traded funds (ETF) for bitcoin futures in the middle of December, and they raised more than $70 million before going public. The announcement that Hong Kong is willing to differentiate its approach to regulating cryptocurrencies from the Chinese crypto ban that will take effect in 2021 was made by the president of the Securities and Futures Commission in Hong Kong in October, just before the event.

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