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Hong Kong regulators continue to be outspoken and clear about creating a regulatory framework for the cryptocurrency industry. Recent news flow indicates that the Hong Kong Securities and Futures Commission will soon issue guidelines for cryptocurrency exchanges. As preparations are underway to make Hong Kong the crypto hub of Asia, regulators warn that cryptocurrency companies should not expect any additional leniency in the regulatory approach.
Signaling Tight and Strong Regulation for Cryptocurrencies
Speaking at the Bloomberg Wealth Asia Summit on May 9, Eddie Yue, Chief Executive Officer of the Hong Kong Monetary Authority, said, “Regulation will be tight. We will allow them to create an ecosystem here and this is actually quite exciting. However, this does not mean that a light-touch regulation will be introduced.”, signaling that the regulation will be strict and strong.
For the last eight months, Hong Kong has been making efforts to adopt cryptocurrencies and regain the city’s reputation as an important financial center. In this context, it is planned to launch the new licensing regime for cryptocurrency service providers from June 1 and allow investors to trade major cryptocurrencies such as Bitcoin and Ethereum.
Banks to be Provided with Regulatory Guidance
The Hong Kong Securities and Futures Commission is working to provide more guidance to banks on servicing cryptocurrency clients. Yue said they will soon hold discussions with banks about the scope of individual investor participation.
Regulators around the world are doing significant work on how to regulate the cryptocurrency industry in the wake of last year’s massive crypto winter, as well as the collapse of the giant cryptocurrency exchange FTX last year. US regulators have been closely monitoring cryptocurrency companies for the past few months.
Admitting that Hong Kong has adopted a very strict approach to cryptocurrencies for the last few years, Yue also gave the good news that this attitude will now be at a reasonable and sustainable level. Yue also warned that Hong Kong will not allow any FTX-type collapse in the city.
Also, Hong Kong regulators are trying to introduce a licensing regime for stablecoins by 2023-2024. This legal framework is expected to bring more transparency in Hong Kong’s regulatory framework.
