Hong Kong is taking steps to restore its status as a global center for cryptocurrencies by launching several legal initiatives related to the crypto industry.
Hong Kong is a city and a special administrative region of China and is willing to separate its approach to cryptocurrency regulation from mainland China’s general ban on cryptocurrencies.
According to Elizabeth Wong, head of financial technology at the Securities and Futures Commission (SFC), the Hong Kong government is considering introducing a separate cryptocurrency regulation bill without China’s involvement.
One of the SFC’s initiatives is to allow retail investors to “directly invest in virtual assets,” Wong said during a panel held by InvestHK, the South China Morning Post reported Oct. 17.
Wong said such an initiative would mark a significant departure from the SFC’s stance over the past four years, which limited cryptocurrency trading on centralized exchanges to professional investors only. Eligible investors include individuals with a portfolio of at least $1 million, or approximately 7% of the city’s population as of September 2021.
Wong emphasized that the crypto industry has become more compliant over the past four years, suggesting it is time to change the city’s attitude towards crypto, saying:
“We think now is the time to really think about whether we want to keep this requirement for professional investors.”
The SFC spokesman also mentioned several other legal initiatives aimed at developing the crypto ecosystem in Hong Kong, including a policy introduced in January to allow service providers to sell certain crypto-related derivatives. The regulator also considered whether to allow retail investors to invest in cryptocurrency-related exchange-traded funds, Wong noted.
The latest news broke in Hong Kong on October 19, when a $3.8 billion fund was launched to attract foreign businesses to the city after a massive exodus of talent caused by severe restrictions and a tense political environment.
On the subject: Bank of China: the volume of transactions in the digital yuan exceeded $ 14 billion
According to an official statement from the government of the Hong Kong Special Administrative Region, the local government has introduced a bill proposing to establish a regulatory regime for virtual asset service providers. The city also plans to introduce new technologies such as non-fungible tokens and a metaverse and turn Hong Kong into an “international virtual asset hub”.
According to some reports, Hong Kong has already achieved success in terms of cryptocurrency adoption. Taking into account a number of factors such as the installation of cryptocurrency ATMs, cryptocurrency regulations, and startup culture, Hong Kong was ranked as the country most prepared for widespread adoption of cryptocurrencies in a Forex Suggest study published in July 2022.