Beijing Indicates Support For Hong Kong’s Crypto Ambition, Report

BitcoinistPublished on 2023-02-22Last updated on 2023-02-22

Abstract

The Chinese government is seemingly not against Hong Kong’s aspiration to become a crypto hub.

The Chinese government is seemingly not against Hong Kong’s aspiration to become a crypto hub. This contradicts Beijing’s stance on matters regarding digital currencies in the mainland.

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Before now, Hong Kong reported its move to regulate and legalize digital currency trading for retail investors. The idea was to allow them to invest directly in digital assets. Beijing supports this move, contradicting the ban on digital currencies in late September 2021.

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Chinese Government To Support Hong Kong’s Digital Aspiration

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A Bloomberg report on February 20 revealed that certain China Liaison Office representatives and other officials have been attending the digital currency meetings in Hong Kong. Apparently, they wish to follow up and better understand the ongoing events. According to the report, both parties enjoy a good rapport during the meetings.

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Local digital currency business operators close to the case suspect that Beijing intends to use Hong Kong as a channel to access crypto dealings. According to digital asset lawyer and National People’s Congress member Nick Chan, the city has permission to carry out these crypto activities provided it avoids violations threatening China’s financial stability.

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Hong Kong is a major city in China, known for its position as a Special Administrative Region of the country. The city strictly follows the policy of open market, which applies to all its ongoing trades and investments.

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Moreover, Hong Kong has followed a Basic Law called the one country, two systems since 1997. This system allows the city to head matters related to finance, trade, and the country’s economy. Also, through the Basic Law, Hong Kong can head cases regarding international trade agreements and relevant international organizations using the official name, Hong Kong, China.

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New Crypto License Regime From Hong Kong’s SFC

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Hong Kong’s Securities and Futures Commission (SFC) announced a new digital currency license regime on February 20. According to the announcement, every centralized exchange in the region must possess a license from the regulator to carry out its crypto services effectively.

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It also noted that retail traders could access these licensed digital currency platforms. SFC believes that refusing citizens of Hong Kong to access the crypto market could force them to trade on unregulated international platforms.

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Crypto market loses grip on the chart | Source: Crypto Total Market Cap on TradingView.com

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The latest rules of Hong Kong’s SFC have triggered a high drive among many digital asset platform owners to expand to the region. Among the list of crypto exchanges considering expanding is Huobi Global. The firm announced that it is willing to obtain a local license that will allow it to carry out its crypto services in the city.

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The company also noted that its intention to create a new exchange strictly for Hong Kong transactions is already in the pipeline. Also, it can easily reach high-net-worth and institutional individuals to contribute more to its growth through the exchange.

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