Hong Kong has relaxed its crypto regulations to permit retail investors to trade digital assets direct. According to reports, a licensing system for crypto platforms which allows retail cryptocurrency trading will be implemented in March 2019.
Hong Kong is nearing allowing retail crypto trading
Bloomberg reports that Hong Kong plans to relax its cryptocurrency regulations and allow crypto trading retail, according to people who are familiar with the situation.
The publication explains that a mandatory licensing system for crypto platforms, which allows retail cryptocurrency trading, will be implemented in March 2019.
Hong Kong plans to legalize retail trading for crypto starting in March after years of skepticism — a stark contrast to mainland China’s ban.
According to the news outlet, regulators also want to permit retail exchanges (exchanges) to list large cryptocurrency, such as bitcoin (BTC), and ether(ETH). The listing rules are likely to include criteria such as the token’s market value, liquidity, and inclusion in third-party crypto indexes.
Gary Tiu (executive director, crypto-firm BC Technology Group) commented on the matter:
The regulators must do more than just introduce mandatory licensing for Hong Kong. They can’t forever effectively close the needs of retail investors.
Michel Lee, the executive president and chief operating officer of Hashkey digital asset financial services, stated that Hong Kong is trying to establish a comprehensive crypto system. He cited tokenized bonds and stocks as an important future segment. “Just trading digital assets on its own is not the goal. The goal is really to grow the ecosystem,” he was quoted as saying.
Hong Kong’s top financial regulator, the Securities and Futures Commission (SFC), introduced a voluntary licensing regime in 2018. The SFC, Hong Kong’s top financial regulator introduced a voluntary licensing regime in 2018. It limited crypto trading platforms only to clients who had at least HK$8million ($1,000,000) of portfolios. However, the tough regulation turned away many crypto businesses and only two firms — BC Technology Group and Hashkey — were approved.
The new regulation of cryptography is being questioned by many. Leonhard Weese, co-founder of the Bitcoin Association of Hong Kong, shared this:
The kind of conversations I’ve had was that people still fear there’ll be a very strict licensing regime. Even if they’re able to deal directly with retail users, they’re still not going to be as attractive or as competitive as overseas platforms.
The SFC’s director of licensing and head of the fintech unit, Elizabeth Wong, said last week: “We’ve had four years of experience in regulating this industry … We think that this may be actually a good time to really think carefully about whether we will continue with this professional investor-only requirement.” She noted that Hong Kong could also authorize exchange-traded funds (ETFs) to offer exposure to mainstream crypto assets.
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