Regulation
Hong Kong reviews ‘overly stringent’ cryptocurrency regulation
Hong Kong is reconsidering its cryptocurrency regulation as lawmakers fear the current regulatory framework could be a deterrent to exchanges.
During a parliamentary session interrogation session Yesterday, Christopher Hui, Secretary for Financial Services and Treasury, said that the Hong Kong Monetary Authority (Atomic Energy Research Institute (HKMA)) and the Securities and Futures Commission (SFC) are reviewing the regulations relating to digital assets.
The HKMA and the SFC “will take into account market developments and review the requirements on VA-related activities as appropriate,” Hui said.
Hui made the comments in response to a lawmaker who questioned whether regulators would speed up the process of reviewing crypto licenses.
He added that licensed companies or registered institutions can distribute cryptocurrency-related products after notifying regulators and “do not need to apply for changes to the licensing conditions.”
From June 1, all cryptocurrency platforms in Hong Kong will have to be licensed by the SFC or be in the process of applying for one.
Hong Kong lawmaker Duncan Chiu described the city’s licensing regulations as “overly stringent” and expressed concern that the rules could hamper trade.
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Chiu declared that these exchange license withdrawals have “shaken market participants’ confidence in Hong Kong’s effort to develop Web3.”
Last month, Hong Kong announced it would establish a subcommittee to draft cryptocurrency regulations.
“To promote the development of Web3 and virtual resources in Hong Kong, the Legislative Council of the Hong Kong Special Administrative Region recently established a Sub-Committee on the Development of Web3 and Virtual Resources,” said Johnny Ng Kit-Chong, member of the Legislative Council of the Hong Kong Special Administrative Region.
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However, in a bizarre twist, Hong Kong is trying to focus on DeFi and the Metaverse.
“The emerging technologies of DeFi and the metaverse, which are closely linked to broader developments in virtual assets and Web3, are likely to present various opportunities for the financial services sector in Hong Kong,” said Enoch Fung, CEO of AoF and executive director of the Hong Kong Institute for Monetary and Financial Research.
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