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While crypto investors keep an eye on the West, another is set on the East. Despite China’s last ban in 2021, mining operations and crypto investments in the country continued. Moreover, a process was initiated to put cryptocurrencies into a legal framework through Hong Kong. Now, officials from Hong Kong are making significant announcements.
Hong Kong: One Country, Two Systems
Titled “One Country, Two Systems,” Hong Kong continues its efforts to become a leading global center for virtual asset services. Regulators have acknowledged that crypto investment plays a vital role. Ahead of the 25th anniversary of the establishment of the Hong Kong Special Administrative Region (HKSAR), opportunities in this area are being discussed. Officials celebrating this milestone mention Hong Kong’s growing status as a significant hub for crypto asset activities across Asia Pacific and beyond.
Last week, Leung Fung-yee, Executive Director of the Hong Kong Securities and Futures Commission (HKSFC), spoke about the city’s new crypto asset licensing regime at an event in Bangkok. Fung-yee stated that the Commission’s goal was not to make HKSAR a hub for cryptocurrency investments, but acknowledged that crypto investments were at the center of an emerging virtual asset ecosystem.
Continuing, Fung-yee said that while crypto investment continues to be banned on the mainland of China, the new licensing system in Hong Kong exemplifies the “One Country, Two Systems” approach that has defined the administration of Hong Kong for the past 25 years. Neil Tan, President of the Hong Kong FinTech Association, reiterated Fung-yee’s comments in an interview this week.
China May Lift Ban
According to Tan, a clear regulatory framework is making HKSAR an attractive location for global digital asset businesses. He mentioned the challenging regulatory environment in the U.S. and pressure on individual crypto investments in Singapore as factors making the region more crypto-friendly.
Tan pointed out that Hong Kong serves as a sandbox for innovation. Furthermore, he observed that Beijing showed interest in “progressing” with its regulatory changes. We can even see concrete steps on this matter. One of China’s largest banks issued a tokenized asset on the Ethereum network. The issuance was carried out in June and was the first issuance on a public blockchain for China.
