Positive development – Hong Kong could increase even more its attractiveness to crypto playersthanks to the regulator’s desire to lift certain prohibitions on exposure to cryptocurrencies.
Cryptocurrencies for Retail Investors in Hong Kong
On February 20, the Hong Kong Securities and Commodities Commission (SFC) issued a consultation paperregarding its proposed regulation of cryptocurrency trading platforms.
The regulator is also reportedly considering allowing crypto trading to retail investorswhich will then be able to trade tokens with a strong capitalization, on approved cryptocurrency exchanges. The commission did not give a specific list of authorized cryptocurrencies.
However, crypto platforms will have to verify a certain amount of information relating to the tokens they offer:
- The team;
- legal risks;
- resistance to attacks, etc.
And in order to be able to offer these services of retail cryptocurrency tradingcrypto exchanges will also have to set up knowledge tests, and offer other security guaranteeslike the establishment of risk profiles, or reasonable exposure limits.
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From a ban on trading cryptocurrencies, to ambitions to become a crypto hub
In 2018, the SFC presented a regulatory framework, which prohibited individuals from trading cryptocurrencies. Water has flowed under the bridge, the regulator has indicated that the “landscape of virtual assets has changed considerably ” Since.
The agency has already authorized the purchase of cryptocurrencies for investors who have at least $1 million, starting June 1. In November, SFC Deputy CEO Julia Leung said the regulator was considering giving approval for trading certain crypto ETFs by professional and private investors.
Apparently, the commission wants to go further and allow more individuals to directly expose themselves to cryptocurrencies, but the regulator wants to put in place the necessary safeguards to protect investors.
This movement in support of cryptocurrency adoption in Hong Kong is all the more important for the crypto community to follow, as China seems to quietly rally according to a February 21 article from The Daily Hodl.
China had banned (yet another time) cryptocurrencies in 2021. Hong Kong has taken the opposite path over the years, gradually transforming the region into a crypto-friendly jurisdiction. Will the Chinese authorities follow the Hong Kong example, or will the region remain an exception?
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