Soon to allow retail cryptocurrency trading in Hong Kong
Hong Kong is relaxing its cryptocurrency regulations to allow retail investors to trade digital assets directly. Local reports said that a licensing system for cryptocurrency platforms allowing retail cryptocurrency trading is scheduled to be implemented in March next year.
Hong Kong Close to Allowing Retail Cryptocurrency Trading
On Thursday, Bloomberg reported, citing people familiar with the matter, that Hong Kong is seeking to relax its strict cryptocurrency regulations with a plan to allow retail cryptocurrency trading.
The mandatory licensing system for cryptocurrency platforms allowing retail cryptocurrency trading is scheduled to be implemented in March of next year.
According to the published report, Hong Kong plans to legalize retail cryptocurrency trading starting in March after years of skepticism, a stark contrast to the ban in China.
Furthermore, regulators are seeking to allow retail exchanges to list large cryptocurrencies, such as bitcoin and ether.
Listing rules likely include criteria such as cryptocurrency market capitalization, liquidity, and inclusion in crypto-intermediate indexes.
Commenting on the matter, Gary Teo, CEO of cryptocurrency firm BC Technology Group, said that the mandatory licensing in Hong Kong is “one of the important things that regulators have to do,” explaining that they cannot effectively shut down the needs of retail investors forever. .
In contrast, Michael Lee, CEO of digital asset financial services group Hashkey, explained that Hong Kong was trying to create a comprehensive cryptocurrency ecosystem, citing digital stocks and bonds as a potentially more important segment in the future.
Li emphasized that digital asset trading in and of itself “is not a goal. The goal is really to grow the ecosystem.”
The Securities and Futures Commission (SFC), Hong Kong's largest financial regulator, introduced a voluntary licensing system in 2018. It restricted cryptocurrency trading platforms to clients with portfolios of at least HK$8 million ($1 million).
However, strict regulations have led to many crypto companies being turned away and only two companies have been approved - BC Technology Group and Hashkey.
However, many people are skeptical about the new regulation of cryptocurrency.
The founder of the Bitcoin Association of Hong Kong Leonard Weiss stated that according to his studies, many people still fear that there is a licensing system that is too strict.
Wiese added that even if these people were able to deal directly with retail users, retailing was still not as attractive as offshore platforms.
On the other hand, Elizabeth Wong, director of licensing at the SFC and head of the fintech unit, said in a statement last week that the region has four years of experience in regulating the industry, and that now “might be a good time to think carefully about whether we continue with this requirement.” The professional is for the investor only.”
She noted that Hong Kong could also allow exchange-traded funds (ETFs) to offer investment in mainstream crypto assets.
It should be noted that retail foreign exchange is a small part of the larger foreign exchange market, where individuals speculate on the exchange rate between different currencies. This sector has developed with the advent of dedicated electronic trading platforms and the Internet which allowed individuals to access the global currency markets.