Hong Kong’s Securities Futures Commission (SFC) has stated that it will be introducing guidelines for crypto licensing in May, intending to provide more clarity to its digital currency ecosystem. This has been a long-awaited move by the SFC.
According to Bloomberg, Hong Kong, which wants to be a crypto hub, will announce guidelines for crypto exchanges intending to open there in May, quoting Hong Kong Securities and Futures Commission (SFC) CEO Julia Leung.
It will offer a clear structure for businesses in Hong Kong’operatingnow-your-customer (KYC) protocols, and anti-money laundering (AML) regulations may be included.
Reports indicate that the guidelines will cover various topics related to digital asset trading, custody, and issuance. This announcement is part of Hong Kong’s efforts to establish itself as a prominent centre for the cryptocurrency industry in Asia.
Hong Kong has hosted several cryptocurrency exchanges and associated ventures in recent years. However, the absence of explicit regulations has made it challenging for these entities to operate with confidence.
Hong Kong Wants To Be The Top Crypto Hub In Asia
Although Hong Kong has been trying to adopt a more lenient attitude towards digital currencies, there are still concerns about how it might affect the industry’s ties with mainland China. This is because cryptocurrency trading and mining were initially prohibited in China in 2017.
Last year, BitMEX founder and former CEO Arthur Hayes added his voice to the discussion, saying that Hong Kong’s ability to attract digital currency businesses will depend on its access to Chinese customers.
“Hong Kong’s position as the most important crypto hub began to tumble gradually at first, and then quickly with the imposition of its zero-COVID policies. But now, it looks like something curious is happening,” he wrote, adding that “it is the ordinary wealthy Chinese people that power the Hong Kong economy.“
The government of Hong Kong is sure that their efforts will be successful.
Hui claimed that over 80 companies were interested in opening shops in Hong Kong. These included wallets, payment service providers, security organisations, blockchain infrastructure providers, and exchanges.
Last month, Nikkei Asia also revealed that several Chinese cryptocurrency businesses, including securities firms and banks interested in enabling customers to trade Bitcoin and Ethereum on authorised exchanges, have their sights set on Hong Kong.
The launch of a new trading platform for Bitget’s Hong Kong customers has been announced in the interim. Per a statement last week, BitgetX Hong Kong plans to apply for a licence under the Hong Kong Virtual Asset Service Provider (VASP) regulations.
While Hong Kong aspires to become Asia’s next hub for digital assets, certain cryptocurrency platforms have decided to cease operations there. On April 24, Bitget, a cryptocurrency exchange with over $1.4 billion in assets under management, announced that as of June 1, it would stop providing cryptocurrency services in Hong Kong.
Some forecasts suggest that Hong Kong could soon surpass Singapore to become the premier cryptocurrency centre in Asia. However, the potential risks associated with digital currencies, such as fraud and money laundering, remain a cause for concern.