Regulation
Hong Kong criticizes ‘excessively strict’ cryptocurrency regulations
Hong Kong is reviewing its cryptocurrency regulations as lawmakers worry the current framework could be a deterrent to trading.
During a parliamentary session interrogation session Yesterday, Christopher Hui, Secretary for Financial Services and the Treasury, said that the Hong Kong Monetary Authority (Hong Kong) and the Securities and Futures Commission (SFC) are currently reviewing regulations regarding digital assets.
The HKMA and the SFC “will keep in mind market developments and revise the requirements for AV-related activities as appropriate,” Mr Hui said.
Hui made the remarks in response to a lawmaker who questioned whether regulators would speed up the process of vetting crypto licenses.
He added that licensed companies or registered institutions can distribute cryptocurrency-related products after notifying regulators, and they “do not need to apply for a change in the license conditions.”
As of June 1, all cryptocurrency trading platforms in Hong Kong must be licensed by the SFC or must be in the process of applying for one.
Hong Kong lawmaker Duncan Chiu described the city’s licensing regulations as “excessively strict” and expressed concern that the rules could discourage trade.
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Chiu declared that these withdrawals of licenses from the exchanges have “shaken the confidence of market players in Hong Kong’s efforts to develop Web3”.
Last month, Hong Kong announced it would launch a subcommittee to draft cryptocurrency regulations.
“To promote the development of Web3 and virtual assets in Hong Kong, the Legislative Council of the HKSAR recently established a subcommittee on the development of Web3 and virtual assets,” said Johnny Ng Kit-Chong, a member of the Legislative Council of the Hong Kong Special Administrative Region.
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However, in a bizarre turn, Hong Kong is seeking to focus on Challenge and the Metaverse.
“The emerging technologies of DeFi and metaverse, which are closely linked to broader developments in virtual assets and Web3, are likely to present various opportunities for the financial services sector in Hong Kong,” said Enoch Fung, CEO of AoF and Executive Director of the Hong Kong Institute of Monetary and Financial Research.
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