Hong Kong’s ambition to become a crypto hub is on the verge of being realized as the Securities Futures Commission (SFC) of the region plans to introduce cryptocurrency exchange licensing guidelines in May 2023. Last year, the financial watchdog established a public consultation forum for this purpose, which included inquiries into the potential for offering cryptocurrency exchange-traded funds (ETFs) in the region. The goal was to determine the best approach to provide retail investors with access to cryptocurrencies. Julia Leung, CEO of the SFC, confirmed that over 150 interested parties responded to the licensing regime’s consultation process.
Retail Investors Gaining Access to Crypto
The forthcoming regulations will support cryptocurrency trading platforms, allowing them to offer trading services to retail investors starting June 1. While it is legal for crypto exchanges to operate in Hong Kong, significant legal restrictions apply to investors. Investors with portfolios under HK$8 million, or approximately $1 million, fall into this category.
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Once regulations are in place, verified exchanges will be able to grant retail traders access to trading popular cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), among others. Currently, Hashkey and OSL are two exchanges authorized by the Hong Kong SFC to provide crypto services.
Hong Kong’s Crypto Hub Ambitions
Hong Kong is making strides to establish itself as a crypto hub, having recently recognized crypto as property. The upcoming industry guidelines will allow the community to gauge Hong Kong’s crypto hub credentials. There already appears to be a growing number of supporters. Christopher Hui, Secretary for Financial Services and the Treasury, recently stated, “Hong Kong is well-positioned to be a leading hub for Web3 in Asia and beyond, and we attach great importance to virtual assets and Web3.”
