Is Crypto Legal in Hong Kong?
Is crypto legal in Hong Kong? It looks like it will be soon.
Hong Kong is taking steps to reclaim its position as a worldwide cryptocurrency hub. It intends to achieve this by launching several legal initiatives related to the crypto industry.
The Chinese city is willing to differentiate its crypto regulation approach from the crypto ban in mainland China.
Years of political upheaval and Covid restrictions prompted a talent departure from Hong Kong, undermining the city's claim to be Asia's financial hub. Officials are now attempting to repair some of the damage by luring businesses back, though how successful they will be remains to be seen.
Crypto legalisation in Hong Kong
Hong Kong intends to legalise retail cryptocurrency trading to become a crypto hub.
The government unveiled a master plan to become a leading Asian crypto hub with legalised retail trading and digital-asset exchange-traded funds to reestablish the city's credentials as a financial centre.
According to a government statement issued on Monday, a consultation will begin on how the retail sector "may be given a suitable degree of access" to tokens. The city has invited global crypto exchanges to explore opportunities.
The Securities and Futures Commission detailed criteria for authorising crypto ETFs for the first time, which would initially only allow investment in Bitcoin and Ether traded on CME Group Inc. exchanges. The permitted futures portfolios could grow over time, according to the regulator.
According to SFC Deputy Chief Executive Julia Leung, asset managers and banks can apply to roll out such ETFs right away. She added that retail customers would be able to purchase the products.
In a policy paper, Hong Kong stated that it would be cautious about the risks to retail investors, improve education, and ensure the proper regulatory framework is in place.
The government also stated on Monday that it is willing to review property rights for tokenised assets and the legality of smart contracts.
The Hong Kong Special Administrative Region's government announced a bill suggesting creating a regulatory framework for companies that offer virtual asset services. City authorities want to make Hong Kong an "international virtual assets centre" by embracing new technologies like non-fungible tokens and the Metaverse.
Hong Kong crypto adoption
Reports claim that Hong Kong has so far been successful in promoting the adoption of cryptocurrencies. In a study by Forex Suggest released in July 2022, the city was ranked the best-prepared country for widespread crypto adoption, taking into account several factors, including crypto ATM installations, pro-crypto regulations, and start-up culture.
Author: Priya Kumari
Priya is a passionate content writer and the co-founder of Finendorse. She is an enthusiastic crypto investor and has a huge interest in the upcoming digitisation age.