Another day, another bitcoin warning from an Asian regulator.
This time it’s Hong Kong’s Secretary for Financial Services and the Treasury, Caejer Chan Ka-keung, who has issued a statement, warning the public that bitcoin is a highly speculative commodity which poses numerous risks.
Chan declared that anyone who decides to trade, exchange or hold bitcoins should expect high risks, as the currency does not have intrinsic value, official issuers or a real economy behind it and it tends to fluctuate wildly. However, since bitcoin is not widely used it does not pose a threat to Hong Kong’s financial system, he added.
Keeping a close eye on bitcoin
Chan stressed that the Hong Kong Monetary Authority has not identified any local banks engaged in bitcoin transactions, and they do not appear to be issuing bitcoin-related products and services, reports The Standard. Chan said:
“We are closely monitoring its development to make sure bitcoin will not shock the stability of the local financial market.”
He added that “special attention” would be paid to money laundering activities involving bitcoin. According to The Standard, Hong Kong’s regulators have shared their opinions with their counterparts in mainland China and the region.
Earlier this week, just hours after it emerged that Taiwan will not allow companies to install and operate bitcoin ATMs on its territory, Hong Kong regulators issued a comparatively positive notice on bitcoin ATMs.
The gist of it was simple – Hong Kong regulators view bitcoin ATMs as vending machines rather than traditional ATMs. The Hong Kong Monetary Authority told The Malay Mail that the Robocoin ATM which is to be installed in Hong Kong is “another channel for acquiring bitcoin or a vending machine”. The regulator said:
“Bitcoin is not regulated by the HKMA. Bitcoin is not a currency but a virtual commodity.”
This is good news for Robocoin, as the company is about to ship its first batch of eight ATMs to Asia. The original plan was to install them in Taiwan and Hong Kong, but Robocoin CEO Jordan Kelley pointed out that demand for bitcoin is high across the Asia.
Taiwan now appears to be out of the game, but it remains unclear which Asian markets Robocoin plans to focus on next. Hong Kong is an obvious choice, as it is a major commercial hub. It is still unclear whether we will see any bitcoin ATMs in mainland China. At this point that does not sound very likely.
Possible actions and fallout
Hong Kong has not yet followed the mainland’s lead in curbing bitcoin transactions. However, some investors will be worried about the prospect of similar actions in the region, which is technically a part of China, albeit a special administrative region.
Hong Kong’s business-friendly policies led many to assume that it could act as a springboard for bitcoin adoption in mainland China, especially following the recent ban.
As a “back door” for bitcoin, Hong Kong makes a lot of sense. However, the question remains as to whether it will remain an oasis for unregulated bitcoin, or whether it will have to fall in line with Beijing. As highlighted earlier this week, Hong Kong’s gradual acceptance of bitcoin could have positive implications on China, provided local regulators don’t clamp down.
Hong Kong Image via Shutterstock