Regulation

Hong Kong’s new crypto regulations come into effect

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The new one from Hong Kong cryptocurrency regulations came into effect on June 1 as the territory’s government seeks to strengthen the region as a fintech and Web3 hub. More than 800 fintech companies currently operate in Hong Kong.

Hong Kong’s new regulations cover asset custody, segregation of client assets and cybersecurity standards. The framework also includes strengthened rules for virtual asset platforms seeking to offer products to retail investors compared to other jurisdictions.

Ben Roth, co-founder and CIO of Auros, a crypto trading company, told The Defiant that Hong Kong’s new regulatory environment is “a major step in the maturation of the industry.”

“This is an important development in the next phase of crypto growth, and sophisticated liquidity providers will be well-positioned to act as the ‘grease in the wheels’ of innovation,” Roth said.

Roth said his firm had recently seen an increase in interest in Hong Kong from “major capital allocators”. “These players want to be well positioned to benefit from a clear regulatory framework,” he said.

Serra Wei, CEO of Aegis Custody, told The Defiant that Hong Kong’s new virtual asset licensing regime is “a game changer for the crypto market.”

Wei said Hong Kong’s progress serves as a “wake-up call to the US market”, adding that US-based crypto companies should “look beyond domestic operations and seize global opportunities” to ensure future growth.

These last months, Coinbase, CircleAnd Ripple have each expressed interest in expanding their operations overseas in response to growing demand. hostile regulatory climate towards crypto companies in the United States.

First Digital Announces USD Stablecoin

First Digital, a Hong Kong-based trust company, announced that it will launch a DollAR-compliant stablecoin on Ethereum and the BNB chain called FDUSD.

Digital First said its programmable stablecoin is backed by “high quality reserves” comprising cash and USD cash equivalents held by regulated financial institutions in Asia. Reserves are held in segregated accounts in accordance with Hong Kong law to prevent commingling of FDUSD reserves with other assets held by First Digital.

“First Digital is fully committed to regulatory compliance to establish a new standard of legitimacy in the industry,” said Vincent Chok, CEO of First Digital.

As per the new rules, FDUSD will not be available to retail traders in Hong Kong. Individuals and businesses interested in using FDUSD should contact the company through its website.

Changpeng Zhao, CEO of Binance, tweeted about the launch of FDUSD on BNB Chain.

Last year, the world’s largest crypto exchange started relax support for major centralized stablecoins USDC, USDP, and TUSD amid the growing popularity of BUSD licensed by Binance and issued by Paxos.

However, the New York Department of Financial Services order Paxos will stop issuing the BUSD stablecoin in February, prompting the exchange to begin put back on sale pairs including USDC and TUSD in recent months.



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