According to the publicly available statement from the Foreign Service Officer, the recently issued Policy Statement on the “Development of Virtual Assets in Hong Kong” outlines the SAR plans to deal with those who use this new technology and those developing it.
The Government of Hong Kong Special Administrative Region (SAR) issued its new Policy Statement at the end of the last month.
In this Policy Declaration, they proposed several pilot programs – such as issuing a new batch of Green Bonds to be tokenized for institutional investors – expecting it to be launched at the end of this year and becoming the world’s first “Tokenized Issuance Government Green Bond.”
Additionally, the Hong Kong Monetary Authority (HKMA) is also researching the possibility of introducing the Digital Hong Kong Dollar, which would act as a link between fiat currencies and blockchain-based virtual assets.
The HKMA recently held a meeting to discuss regulating stablecoins that can be used as payment methods. They will release the findings of this discussion shortly, and it will “provide the necessary support for promoting more innovations.”
According to the official statement:
the entire policy declaration aims to construct a comprehensive regulatory framework for the virtual asset industry, actively encourage technological innovation and application, and at the same time ensure proper risk management and control.
Balanced Regulatory Framework For Virtual Assets
Along with aggressively embracing innovation, they also believed that there should be flexible regulatory support that keeps up with the trends.
The notice highlighted that it is necessary now that many cryptocurrency prices have decreased significantly or certain crypto-related companies, such as FTX, have gone bankrupt. Insiders call this a Crypto Winter, leading people to think about new ways of regulating things.
The government notice further claimed that to protect investors and promote innovation, The China Securities Regulatory Commission (CSRC) has closely monitored the developments of new technology – specifically when it comes to virtual currency.
Two virtual asset exchanges have received licenses from CSRC on the regulatory tenet of “same business, same risk, same rules.” These exchanges are required to meet all financial resource and operating expense requirements stipulated to be allowed to operate legally under these regulations.
Moreover, the SFC authorized two brokerages to carry out virtual asset transactions for their customers under the omnibus account structure and gave licenses to eight virtual asset fund management firms.
This new statement from the SFC suggests there will be public consultations on how to ensure small-scale retail investors can access virtual assets under their newly implemented licensing system. They may introduce ETFs investing in virtual assets, which the Hong Kong government supports.