Regulation
Hong Kong to adapt cryptocurrency regulations to the evolution of the sector
from Hong Kong Financial regulators are ready to adjust their approach cryptocurrency regulation as the industry develops, according to Finance Secretary Christopher Hui.
Speech in a parliamentary sessionHui said the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) would take market trends into consideration when drafting regulations. He said:
The HKMA and the SFC will take into account market developments and, if appropriate, review the requirements relating to VA-related activities.
Hui’s comments came in response to questions about the potential acceleration of the cryptocurrency licensing process and loosening rules for intermediaries distributing crypto assets. He clarified that licensed firms and registered institutions can distribute crypto-related products after notifying regulators, without having to change their licensing conditions.
This discussion follows the withdrawal of licensing applications by several major global cryptocurrency exchangesincluding OKX, Gate.io and HTX, before the SFC’s June 1 deadline. After that date, all cryptocurrency trading platforms operating in Hong Kong must be licensed applicants or “deemed licensed.”
Hong Kong’s stringent licensing regulations have drawn criticism from some quarters. Legislator Duncan Chiu has raised concerns that overly stringent rules have prevented major global exchanges from entering the Hong Kong market. In a recent opinion pieceChiu argued that these withdrawals have undermined confidence in Hong Kong’s efforts to establish itself as a Web3 hub.
The Cryptocurrency Landscape in Hong Kong
Hong Kong approved the launch of six commercials Bitcoin (BTC) AND Ethereum (ETH) exchange-traded funds (ETFs) in early May. The products were issued by China Asset Management (ChinaAMC), Bosera Asset Management, and Harvest Global Investments and allow exposure to cryptocurrencies without technical expertise.
Earlier this month, the Banque de France (BDF) and the Hong Kong Monetary Authority also a memorandum of understanding was signed on bilateral cooperation on wholesale development of central bank digital currencies and tokenization. The two regulators are willing to explore interoperability between their digital currencies and cross-border transactions.