Hong Kong publishes virtual asset policy declaration, open to legality of property rights of tokenized assets and smart contracts

According to MarsBit, the Hong Kong SAR government today issued a policy statement on the development of virtual assets in Hong Kong, clarifying the government’s policy stance and guidelines for the development of a vibrant virtual asset industry and ecosystem in Hong Kong. The policy statement covers the following levels:

1. Vision and policy: Hong Kong is an international financial center and has an open and inclusive attitude towards innovators engaged in virtual asset business around the world. The Government is now working with financial regulators to create a favorable environment for the sustainable and responsible development of the virtual asset industry in Hong Kong. We will formulate the necessary restrictions in a timely manner to mitigate actual and potential risks in accordance with international standards, so that virtual asset innovation can flourish in Hong Kong in a sustainable manner.

2. Regulation: We believe that a consistent, clear and clear overall regulatory framework can help lay a solid foundation to meet the financial innovation and technological development brought about by the rapid development of global virtual assets. While stepping up preparations for a new licensing system for virtual asset service providers, we are also happy to contact the global virtual asset industry and invite relevant exchanges to explore business opportunities in Hong Kong. The Hong Kong Securities and Futures Commission will launch a public consultation on the appropriate extent of virtual assets that retail investors can trade under the new licensing regime. The government welcomes the introduction of virtual asset exchange-traded funds (ETFs) in Hong Kong. The government is open to reviewing the legality of property rights and smart contracts of tokenized assets in the future to facilitate its development in Hong Kong. The Hong Kong Monetary Authority will release the consultation results and next steps on the regulatory regime for stablecoins later.

3. Pilot scheme: The government and regulators are studying the launch of the following pilot scheme to test the technical benefits brought by virtual assets and try to further apply the technology to the financial market. These pilot programs include the issuance of non-fungible tokens (NFTs) for Hong Kong FinTech Week 2022, green bond tokenization and a Crypto Hong Kong dollar.

4. Outlook: We will implement the vision set out in this policy statement through convenient policies, comprehensive and balanced regulation, risk-based regulation, and various pilot programs. The government sincerely invites the global virtual asset industry to join hands with us, leveraging Hong Kong’s status as an international financial center, complying with the best international standards and practices, and unleashing the potential of financial innovation in a clear, flexible and convenient regulatory environment.

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