As Hong Kong FinTech Week kicks off, today the Hong Kong government issued a policy statement on crypto assets, showing a cautious but slightly open stance on so-called virtual assets (VA).
The first pillar of the policy is a plan to regulate service providers in addition to existing cryptocurrency exchanges opting into regulation.
Second, the Securities and Futures Commission will hold a public consultation on how to give retail investors an “appropriate level” of access to cryptocurrencies. It also acknowledged that ETFs have been approved in other jurisdictions and are “open to possibilities” in Hong Kong.
Finally, property rights to tokenized assets will be reviewed, exploring the legality of smart contracts.
The government also highlighted pilot projects such as NFTs, its eHKD CBDC and green bond plans at Hong Kong FinTech Week.
“The government is ready for this future, we welcome fintech and the veterans community and talent to gather in Hong Kong, and we will promote the sustainable development of financial services across the veterans value chain,” said Mr Xu, Director of Financial Services and the Ministry of Finance .
The policy statement describes “the entire VA value chain, including VA issuance, tokenization, trading and settlement platforms, financing and asset management, and custody.”
Keep in mind that some Hong Kong-based crypto firms have relocated to Singapore, which announced a series of conservative consultations last week. For example, Singapore is considering imposing knowledge and education requirements on non-accredited investors before they invest in cryptocurrencies.
Allowing banks to interact with cryptocurrency service providers
Hong Kong emphasizes its adherence to the principle of “same activity, same risk, same regulation”. It said it planned to regulate anti-money laundering and investor protection service providers “currently applicable to traditional financial institutions”.
The benefit of this increased oversight is that “financial intermediaries and banks will be able to work with licensed VA exchanges.”
The government’s description of the opportunities offered by cryptocurrencies underscores the government’s caution, emphasizing the metaverse, tokenized real-world assets, and CBDCs.
“Hong Kong is showing signs of a vibrant VA ecosystem, as evidenced by the issuance of NFTs in our market, the presence of Metaverse developers, and the use of DLT in trade finance, among others,” the policy statement said. “If we look further into more use cases, such as trading art and collectibles, tokenizing antique goods, or, in the case of financial innovation, tokenizing a broad range of products such as debt securities, more can be achieved. more opportunities.”
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