The Hong Kong government aims to become a hub for crypto and FinTech.
Things are on the go. The Hong Kong government has put a spin on crypto and now wants to fully embrace it.
On October 31, the Hong Kong government issued a policy statement on the development of virtual assets in the Special Administrative Region (SAR).
The statement outlined the government’s policy and approach to developing what it called a “vibrant sector and ecosystem” for cryptocurrencies in Hong Kong. It appears to be a sea change from earlier this year when it wanted to strictly regulate crypto exchanges.
Crypto billionaire Sam Bankman-Fried tweeted that, “I deeply appreciate when policymakers engage constructively and optimistically with the people who matter the most for an industry’s direction: the customers.”
Hong Kong with Open Arms
The statement covers a number of key areas, including vision and approach. The first step was to welcome crypto businesses with open arms.
“Hong Kong is open and inclusive towards the global community of innovators involved in VA [virtual asset] business.”
In addition, it plans to establish international standard risk mitigation guardrails while promoting sustainable innovation.
The Hong Kong Securities and Futures Commission (SFC) will consult publicly on how to allow greater access to cryptocurrencies for retail investors. Furthermore, the government stated that it will also be open to the possibility of holding crypto exchange-traded funds (ETFs) in its markets.
It doesn’t stop there. The Government is also open to future revisions of the property rights of the tokenized assets. In addition, it is investigating the legality of smart contracts to facilitate their development.
According to the statement, there will be a number of pilot projects. These include the issuance of non-fungible tokens (NFTs) for Hong Kong Fintech Week 2022. They also mentioned green bond tokenization and an e-HKD CBDC. Financial Secretary Paul Chan had this to say:
“Our political stance on VA [virtual assets] is now clearly communicated to global markets and serves to demonstrate our commitment and determination to explore financial innovations together with the global VA community.”
Opening the Door to China?
Last week, former BitMEX CEO Arthur Hayes hinted at a crypto hug from Hong Kong. He said the move would likely open the door for China to re-enter the markets. This is likely to spur the next bull run, he added.
“When [China] loves crypto, the bull market will come back. It will be a slow process, but the red buds are sprouting.”
Hong Kong may become a proxy testing ground for Beijing to experiment with crypto politics. Additionally, it can also serve as a conduit for Chinese money back into digital assets.
By Audy Castaneda
