- Hong Kong Monetary Authority’s Eddie Yue confirmed that Bitcoin startups will be allowed in Hong Kong.
- The SEC will soon release a detailed list of how involved retail traders should be.
Hong Kong will open its doors to Bitcoin [BTC] businesses in less than a month. However, financial watchdogs have warned them not to expect a smooth trip.
Hong Kong Monetary Authority’s Eddie Yue announced on 9 May that restrictions “will be tight.” Speaking at the Bloomberg Wealth Asia Summit this week, he said that although Bitcoin startups are welcome, they shouldn’t anticipate things to be straightforward.
Hong Kong introduces new regulations
On 1 June, Hong Kong will begin a new licensing system for companies that offer virtual asset services. It also intends to enable ordinary investors to trade significant crypto assets. However, mainland Chinese traders won’t have access to this chance because of Beijing’s ban on cryptocurrencies.
Yue continued by saying that banks will soon receive more instructions on how to deal with crypto clients. According to him, the Securities and Futures Commission (SFC) would shortly make public the conclusions of its deliberations on the extent of involvement by retail investors.
Permits will be given to platforms that deal with digital assets under the new regulatory system. Throughout the following year, a stablecoin licensing requirement is anticipated to be implemented.
The previous few years have seen highly strict crypto guardrails in Hong Kong. They have now, however, been reduced to a “reasonable and sustainable level,” according to Yue. However, they won’t permit any FTX-style events to happen again in the city.
Regulations in the past
The region’s securities authority put up a proposal in February for a licensing framework for Virtual Asset Service Providers (VASPs) that would permit retail traders access to authorized crypto platforms.
It was mentioned that restricting access would drive traders to unregulated foreign platforms. These platforms can only currently accommodate accredited professional investors.
Securities and Futures Commission (SFC) CEO Julia Leung Fung-yee said that the governments of China and Hong Kong are both aware of the prospects in the area and are acting to encourage inbound talent.
There will be extensive testing of the tokens that can be listed for trading in Hong Kong. Along with supply, demand, and liquidity checks, background checks on the issuers and developers will be necessary.
Market-making will not be allowed, and cryptocurrency exchanges will need to be completely insured to cover any risks or potential losses. While everything is going on across the Pacific, the situation for Bitcoin companies in the United States is getting worse.
