Overview
• The Chinese government is seemingly not against Hong Kong’s aspiration to become a crypto hub.
• Beijing supports this move, contradicting the ban on digital currencies in late September 2021.
• Hong Kong’s Securities and Futures Commission (SFC) announced a new digital currency license regime on February 20.
Beijing Supports Hong Kong Crypto Aspiration
The Chinese government is seemingly not against Hong Kong’s aspiration to become a crypto hub which contradicts Beijing’s stance on matters regarding digital currencies in the mainland. 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 and Beijing supports this move, contradicting the ban on digital currencies in late September 2021. 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 indicating their interest to follow up and better understand the ongoing events. Local digital currency business operators close to the case suspect that Beijing intends to use Hong Kong as a channel to access crypto dealings.
Hong Kong Special Administrative Region
Hong Kong is a major city in China, known for its position as a Special Administrative Region of the country with open market policy applicable for all trades and investments with permission from Beijing provided it avoids violations threatening China’s financial stability. Since 1997, Hong Kong has followed a Basic Law called ‘one country, two systems’ allowing it head matters related to finance, trade and economy as well as international trade agreements using official name ‘Hong Kong, China’.
New License Regime by SFC
HongKong’s Securities & Futures Commission (SFC) announced new regulations of licensing regime for cryptocurrencies on Feb 20th where every centralized exchange is required to apply for an SFC license if they wish operate legally or face consequences otherwise .The objective of these regulations are aimed at minimizing risks associated with money laundering , terrorist financing & fraud protection . Additionally these regulations also requires intermediaries such as fund managers , portfolio managers & sponsors who intend provide services related cryptocurrency must obtain licenses from SFC within specified timelines .These regulations will enable exchanges & intermediaries operating within framework set out by SFC creating more secure environment where users can trust that their funds are safe .This will create more opportunities & growth prospects while also enforcing consumer protections standards that were previously lacking .
Conclusion
It appears Chinese Government is actively supporting HK’s ambition towards becomingCrypto-hub through various measures while taking necessary steps towards protecting interests of investors & consumers by introducing strong regulatory framework under strict supervision of SFC making sure no illegal activities are carried out through cryptocurrency transactions . These regulatory framework will help promote legitimate activities within cryptocurrency domain helping HK gain global recognition among leading countries regulating Cryptocurrency world wide