Crypto in Hong Kong Getting Soft Backing From Beijing: Bloomberg

Report says officials from China’s Liaison Office have been spotted at crypto events in the city.

AccessTimeIconFeb 21, 2023 at 4:23 a.m. UTC
Updated May 9, 2023 at 4:08 a.m. UTC
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As Hong Kong prepares for a consultation process that might eventually legalize a form of retail crypto trading in the territory, Bloomberg reports the mainland government in Beijing might be subtly endorsing the idea.

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  • According to Bloomberg, officials from China’s Liaison Office have been frequent guests at crypto gatherings in Hong Kong. The tone of their visits and followup calls with certain projects has been friendly.

    Some stakeholders think that this can be seen as an endorsement of Hong Kong’s push to become a crypto hub, with the Special Administrative Region of China using its separate legal system and markets to be a testing ground – much in the same way as Hong Kong was China’s first test of open markets in the 20th century.

    “As long as one doesn’t violate the bottom line, to not threaten financial stability in China, Hong Kong is free to explore its own pursuit under ‘One Country, Two Systems,’” Bloomberg quotes Nick Chan, a National People’s Congress member and a crypto lawyer, as saying.

    On Monday, Hong Kong’s Securities and Futures Commission (SFC) made its first push to open the door to retail crypto trading, beginning a consultation process for Virtual Asset Service Providers (VASP) seeking a license to provide trading services for retail.

    Some of the requirements the SFC proposes involve a due diligence process on tokens prior to listing, which would see only pre-approved tokens available to traders, as well as setting up a risk profile for clients to ensure their exposure is “reasonable.”

    The SFC has just concluded a multi-year consultation process that will see exchanges being allowed to serve professional investors (defined as those with a net worth of over $1 million) on June 1.

    It’s not known when the SFC will finish its consultation process on allowing retail investors access.

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