Hong Kong’s Progress in Implementing Crypto Licensing Highlighted in Latest China Financial Stability Report
In its latest China financial stability report, the People’s Bank of China emphasized the advancements made by Hong Kong in implementing crypto licensing amidst regulatory changes both internationally and in mainland China.
Now, despite 51 nations banning cryptocurrencies, Hong Kong remains one of the more crypto-friendly cities. Hong Kong has shown resilience in strengthening its crypto regulations despite restrictions.
According to the People’s Bank of China, Hong Kong has made significant progress in regulating and licensing crypto assets. This progress comes at a time when mainland China continues to impose restrictions on crypto trading and the international framework for crypto assets introduced by the Financial Stability Board undergoes regulatory changes.
The annual China Financial Stability Report highlighted the role of Hong Kong’s Securities and Futures Commission (SFC) in regulating and licensing virtual assets. The commission categorizes virtual assets under securitized and non-securitized financial assets for supervision and enforces a unique “dual license” system for digital asset exchanges. Major financial institutions like HSBC and Standard Chartered Bank are required to integrate virtual asset platforms into their customer monitoring processes, and crypto asset businesses must obtain licenses from the commission.
In December, the Securities and Futures Commission issued licenses to four new crypto exchanges, including Accumulus GBA Technology (Hong Kong), DFX Labs, Hong Kong Digital Asset EX, and Thousand Whales Technology (BVI). Eric Yip, the SFC’s executive director of intermediaries, expressed the commission’s proactive engagement with virtual asset service providers to uphold regulatory standards and expedite the licensing process.
Despite Hong Kong’s efforts to align with the International Regulatory Framework for Crypto Assets established by the Financial Stability Board, some crypto institutions have voiced disapproval of the SFC’s regulatory requirements. Out of nearly 30 companies that applied for licenses this year, only around a dozen are still awaiting approval, as platforms like OKX and HTX withdrew their applications due to stringent regulations.
In conclusion, Hong Kong’s progress in implementing crypto licensing reflects its commitment to balancing investor protection and fostering the growth of the virtual asset ecosystem. With ongoing regulatory developments, Hong Kong continues to navigate the evolving landscape of crypto assets while striving to maintain its reputation as a crypto-friendly city.