Hong Kong’s Securities Futures Commission (SFC) announced that it is releasing crypto license guidelines in May to better clarify its digital currency sphere, a development that has been in the pipeline for a while now.
According to the reports, the guidelines will address various matters regarding trading, custody, and issuance of digital assets. The announcement comes as Hong Kong <a href="https://techcrunch.com/2023/02/20/hong-kong-crypto-regulation/” rel=”nofollow noopener” target=”_blank”>seeks to position itself as a leading hub for the cryptocurrency industry in Asia.
While it has been home to several cryptocurrency exchanges and related businesses in recent years, the lack of clear regulations has made it difficult for these companies to operate with certainty.
Hong Kong To Issue crypto Guidelines
SFC’s CEO, Julia Leung, noted in the <a href="https://www.bloomberg.com/news/articles/2023-04-27/hong-kong-sfc-to-issue-crypto-exchange-license-guidelines-in-may#xj4y7vzkg?” rel=”nofollow noopener” target=”_blank”>report that the anticipated guidelines would facilitate the trading services of crypto platforms beginning from June 1.
It will provide a clear framework for companies seeking to operate in the cryptocurrency space in Hong Kong. This could include anti-money laundering (AML) requirements and know-your-customer (KYC) procedures.
Leung said in the report that the licensing regime has already gained more than 150 responses from interested parties. Also, some trading platforms have already begun offering digital asset services to investors under the supervision of the Securities Futures Commission.
Notably, Reuters <a href="https://www.reuters.com/technology/hong-kong-woos-mainland-china-crypto-firms-push-bolster-finance-hub-status-2023-04-13/” rel=”nofollow noopener” target=”_blank”>revealed Hashkey Group and OSL, among the trading platforms, have already obtained their licenses from the commission. However, some prospective Virtual Asset Service Provider (VASP) licensees still await confirmation from the SFC.
While Hong Kong seeks to be Asia’s next digital asset hub, some crypto platforms have decided to end their operations in the city. On April 24, Bitget, a digital currency exchange with over $1.4 billion worth of assets in its custody, reported that it would no longer offer cryptocurrency services in Hong Kong after June 1.
Hong Kong’s Move To Be Next crypto Hub In Asia
Meanwhile, Hong Kong has long been committed to creating a favorable environment for the crypto industry. In October 2022, the Hong Kong government announced plans to develop a regulatory framework for virtual asset exchanges. The move aimed to provide greater clarity and protection for investors.
Related Reading: Digital Currency Backed By Gold To Be Introduced By Zimbabwe’s Central Bank
Hong Kong’s status as a financial center and its proximity to mainland China, where cryptocurrencies are <a href="https://www.cnbc.com/2023/03/23/binance-employees-volunteers-tell-users-how-to-evade-china-crypto-ban.html” rel=”nofollow noopener” target=”_blank”>banned, made it an attractive location for digital asset companies. The city’s well-established legal system and English-speaking workforce are also part of its high points.
Some predict that Hong Kong could soon become the leading crypto hub in Asia. However, there are concerns about the risks associated with cryptocurrencies, including money laundering and fraud.
However, the Hong Kong government has pledged to address these concerns by releasing licenses to crypto trading platforms in the city.
Featured image from Pixabay and chart from Tradingview
Breaking news about decentralized digital money and blockchain technology.