The move is generally a clear indication that Hong Kong can no longer ignore the needs of retail users.
Hong Kong is making impressive leaps and bounds to re-establish its shores as a hub for all things crypto with its latest attempt centered on granting retail crypto trading allowance. As reported by Bloomberg citing sources close to the matter, Hong Kong regulators will permit the listing of established cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) on platforms where retail traders can access them, but will not endorse the investments.
Plagued by COVID-19, and geopolitical turmoil, there has been a significant brain drain in the crypto industry from Hong Kong as the harsher environment forced many industry participants to go ply their trades in other friendly nations. In a city that once served as a home for Binance’s Changpeng Zhao and Sam Bankman-Fried, the Co-Founder and CEO of the FTX derivatives exchange, the attempt to win back these big names has gotten quite a number of stakeholders to wonder in skepticism.
The voluntary licensing program that was instituted back in 2018 compelled virtual asset service operators to limit their offerings to institutional investors with a capital base of at least HK$8 million ($1 million). The regime was so tough that only two companies were granted the license to operate at the time and they include BC Group and HashKey.
Per the report, the timeline to approve the listing of these tokens for retail traders is yet to be finalized, but the indications are that the attempt will be accompanied by making a public consultation first. The move is generally a clear indication that Hong Kong can no longer ignore the needs of retail users.
“Introducing mandatory licensing in Hong Kong is just one of the important things regulators have to do,” said Gary Tiu, executive director at crypto firm BC Technology Group Ltd. “They can’t forever effectively close the needs of retail investors.”
What the Hong Kong New Crypto Will Look Like
The plan to soften its stance when it comes to the way retail investors engage with the digital currency ecosystem was first hinted at by Elizabeth Wong, the Head of Fintech at the Hong Kong Securities and Financial Commission (SFC) when she said the commission will float a whole different regulation from mainland China.
Since the news broke, stakeholders have been wondering what the Hong Kong crypto regime will look like considering its close political affiliation to mainland China which proscribed all crypto-related transactions last year.
“The kind of conversations I’ve had was that people still fear there’ll be a very strict licensing regime,” said Leonhard Weese, co-founder of the Bitcoin Association of Hong Kong. “Even if they’re able to deal directly with retail users, they’re still not going to be as attractive or as competitive as overseas platforms.”
With the plans to bolster its retail crypto embrace set to be unveiled as early as next week at a fintech conference that is set to commence on Monday, the region’s plans will start unraveling and better understood by all.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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