Hong Kong wants to legalize cryptocurrency trading

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Hong Kong’s securities regulator wants to allow retail investors to invest directly in virtual assets and reconsider current cryptocurrency trading requirements.

Hong Kong is taking steps to regain its status as a global cryptocurrency hub by launching various legal initiatives related to the cryptocurrency industry.

Hong Kong, a city and special administrative region of China, is willing to distinguish its approach to regulating cryptocurrencies from the blanket ban on cryptocurrencies in mainland China.

The Hong Kong government is considering introducing its own bill to regulate crypto in its freeway from China, according to Elizabeth Wong, head of the fintech unit at the Securities and Futures Commission (SFC).

One of the SFC’s initiatives is to allow retail investors to “invest directly in virtual assets,” Wong said during a panel held by InvestHK, the South China Morning Post reported on Oct. 17.

This initiative would mark a significant change from the SFC’s stance of the past four years, which restricts trading of cryptocurrencies on centralized exchanges to professional investors, Wong noted. Eligible investors include individuals with a portfolio of at least $1 million, or about 7% of the city’s population, as of September 2021.

Wong emphasized that the crypto industry has become more compliant in the last four years, suggesting that it is time to change the city’s stance on crypto, stating:

“We think this may be a really good time to think carefully about whether we’re going to continue with this professional investor-only requirement.”

The SFC official also mentioned some 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 derivatives related to cryptocurrencies. The regulator has also been looking into allowing retail investors to invest in cryptocurrency-related ETFs, Wong noted.

The latest news comes amid Hong Kong, which on Oct. 19 launched a $3.8 billion fund to lure foreign companies back to the city after a mass exodus of talent triggered by strict lockdowns and tense weather. political.

According to an official statement from the government of the Hong Kong Special Administrative Region, the local government has submitted a bill to propose the establishment of a regulatory regime for virtual asset service providers. The city authorities also plan to embrace emerging technologies such as non-fungible tokens and the metaverse and turn Hong Kong into an “international hub for virtual assets.”

According to some reports, Hong Kong has already been successful in terms of cryptocurrency adoption so far. Taking into account a number of factors such as cryptocurrency ATM facilities, pro-crypto regulations, and startup culture, Hong Kong was ranked as the country best prepared for mainstream crypto adoption in a Forex Suggest study published on July 2022.