Hong Kong is planning to legalize retail trading for Bitcoin and other cryptocurrencies. The recent U-turn on crypto regulations comes after the city took a tough position on crypto assets over the past few years.
Hong Kong’s plans to support crypto
According to a report by Bloomberg, Hong Kong is planning to make Bitcoin and cryptocurrency trading legal in the city. The Hong Kong government and other regulatory bodies in the city are planning to set up a mandatory licensing regime that will be enforced by March next year.
On the other hand, regulators also want cryptocurrency companies to look for permission that will allow them to list Bitcoin and other cryptocurrencies. However, the city will not announce whether it will endorse any single asset.
Sources have said that the dates for when this bill will be passed and crypto is legalized in Hong Kong are not yet known. However, it is not likely that the requirements for listing cryptocurrencies will depend upon the market value, liquidity, and membership status of third-party cryptocurrency indices.
Under the new expected measures, the government plans to achieve its goal of being a hub for cryptocurrency activities. The government is expected to make a statement on its stance on digital assets at a fintech conference that will be held on Monday, which could change the outlook for the entire crypto industry in the city.
Hong Kong is also planning to reacquire its position as a global financial hub by accepting digital assets. The digital asset space has grown significantly in recent years. However, amid this growth, regulatory clarity is lacking.
The other details noted down in the report are that Hong Kong will be following the paths that have been taken by other countries that have supported exchange-traded funds to provide indirect access to crypto assets for institutional investors and wealthy investors. Such restrictions are being made to protect retail investors from volatility.
Hong Kong plans to be a digital assets hub
The report in question also hints that supporting the retail trading for Bitcoin and other cryptocurrencies would be the start of Hong Kong attempting to support innovations in the digital space. The report has also added that tokenized stocks and other financial products could be on the horizon and will be instrumental in supporting the sector’s growth.
Authorities in the city are also planning to support emerging technologies such as non-fungible tokens (NFTs) and the metaverse. Such an adoption could see notable growth of the web 3.0 & crypto sector in Hong Kong.
On October 19, Hong Kong announced plans to release a $3.8 billion fund to attract foreign companies to the city amid a notable increase in the talent leaving the city following a series of lockdowns and a hostile political climate. These restrictions have deterred foreign companies from moving into the country.
Some reports have said that Hong Kong is already winning the fight to support the rise of cryptocurrency activities. Several factors are behind this growth, such as installations of crypto ATMs, positive cryptocurrency regulations, and positive startup culture. A study conducted in July 2022 ranked Hong Kong as the best country for cryptocurrency adoption.