Hong Kong May Overturn Crypto Rules, Open Trading to Retail Investors: Report
Hong Kong is planning to put new rules in place that would make retail crypto trading legal in the city, as part of its efforts to become a center for crypto, Bloomberg reported.
The program, which is expected to launch in March next year, would reportedly put in place mandatory licensing for crypto platforms.
But the timetable for such a move is not finalized and is still subject to public consultation.
It comes amid Hong Kong’s efforts to regain ground as a crypto hub after Covid-19, political turmoil, and regulation took the shine off the city’s reputation as a place for cryptopreneurs to do business.
The move to let retail traders back in on digital assets was teased by Elizabeth Wong, head of the fintech unit at the Securities and Futures Commission (SFC), last week.
Speaking at an event, she said the government was considering its own crypto regulation bill, and that the SFC was looking to allow individuals to “directly invest into virtual assets.”
The city was in the past a powerhouse for crypto in Asia, playing host to the likes of Binance and Sam Bankman-Fried’s FTX.
But a voluntary licensing regime introduced in 2018 effectively limited crypto platforms to institutional clients with portfolios worth at least HK$8 million ($1 million).
Allowing consumer-facing platforms to operate could represent a first step to winning back firms that have turned attention away from Hong Kong in recent years.
China crucial to Hong Kong’s crypto success
Questions remain over what a looser approach in Hong Kong would mean for the industry in relation to mainland China.
Writing on his blog in response to news of Hong Kong’s “comeback” efforts, BitMex co-founder Arthur Hayes said that access to Chinese customers is crucial to Hong Kong’s attractiveness to crypto companies.
“As crypto investors, we care about Hong Kong’s ability to facilitate Chinese capital’s needs,” he wrote. “Whether it is in retail sales or capital flows, it is the ordinary wealthy Chinese people that power the Hong Kong economy.”
He also expressed misgivings about how China could exert its power over Hong Kong to undercut any pro-crypto changes.
“What’s to say that Beijing won’t change its opinion tomorrow and rescind all these positive crypto policies?”
But he added that he believes, this time, “China is for real.”Source