Hong Kong to check the legalization of the crypto cland in retail

Hong Kong takes steps to legalize retail with crypto assets, in a reversal that contrasts Beijing's action against such transactions on the Chinese mainland.

The regulatory authorities of the Chinese territory also check the listing of crypto -traded funds, the financial authorities said Hong Kongs on Monday, as the city's rivalry intensified with Singapore for the regional financial center.

The Securities and Futures Commission "actively tried to set up a regime to authorize ETFs that offer an engagement in common virtual assets with appropriate guardrails to protect investors," said the deputy chairman and managing director Julia Leung.

"In the initial phase, we expect the underlying assets to limit themselves to Bitcoin futures and ether futures that are being traded at the Chicago Mercantile Exchange," Leung at FinTech Week told the first major financial events after the scrapping of Hong Kong Hotelquantana last month.

The SFC will carry out a public consultation about how small investors can be granted an appropriate level of access to digital assets within the framework of the new license regime, said Hong Kong. The rules currently limit crypto trades to institutional investors with a portfolio of at least 8 million hk $ ($ 1 million).

Hong Kong's step comes because Singapore tries to tighten the threshold for the crypto retail trade, whereby new restrictions are expected. Last year Beijing declared all activities related to digital coins for illegal.

After the infection with Coronavirus, Hong Kong's CFO Paul Chan said on Fintech Week by video that the city was "open and integrative" in terms of digital assets. The explanation comes after Covid-Bordstones undermined Hong Kong as a financial center and led to an exodus of residents.

"We would like to make our political attitude towards the global markets to demonstrate our determination to research financial innovations together with the global community of virtual assets," said Chan.

A draft law for the introduction of a legal license system for providers of virtual assets is currently adopted by the Hong Kong legislative and is expected to come into force in March next year.

Charles Li, former managing director of Hong Kong Exchanges and Clearing, which runs the city's stock exchange, said about the political announcement: "I think the psychological needle will move quite a bit and at least enable the conversation [about digital assets in Hong Kong]."

But he warned that many segments in the industry have “imported all the crap and all of the fraud that we have been practicing in traditional finance for over a hundred years. And there is a new generation of people who are ready to be robbed.”

Other goods more confident. "Hong Kong has a rich history of foreign exchange trading in retail and we have been believing for some time that this could one day be reproduced with virtual currencies. This day has come," said Vince Turotte, Director of Digital Assets at Eventus based in Hong Kong.

"The importance of the participation of private investors in [Virtual Asset Service Providers] cannot be overestimated. The generation of sufficient liquidity and order currents from investors and speculators in virtual assets, especially in cryptocurrencies, is of crucial importance for market and vasp business models," added Turcotte.

Additional reporting by William Langley in Hong Kong