Hong Kong’s Crypto Ambition Receives Subtle Nod from Beijing: Report
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Hong Kong’s ambitions to become a cryptocurrency hub are reportedly being subtly backed by the Chinese government, which could be seen as a contrast to the mainland’s hardline anti-crypto stance.
In October last year, the Hong Kong government floated the idea of introducing its own bill to regulate crypto and allow retail investors to “invest directly in virtual assets,” potentially at odds with China’s widespread crypto ban.
According to people familiar with the matter, Beijing officials have not brazenly rejected the idea. According to a Feb. 20 Bloomberg report, representatives from the China Liaison Office are said to have frequented crypto gatherings in Hong Kong to understand what is going on.
So far, their encounters with Beijing officials on the matter have been friendly, according to the sources, which is perceived by local crypto businessmen that Beijing may be open – albeit very subtly – to using Hong Kong as a testing ground for crypto.
New Bitcoin Narrative Brewing: Hong Kong Jumps Into Crypto
What makes it even more interesting is that the People’s Bank of China is one of the few central banks in the world to cut and loosen interest rates.
Asia offers (sources) pic.twitter.com/n5cwE7jI2l
— Lukas Martin (@VentureCoinist) February 16, 2023
Hong Kong is a special administrative region of China which allows it to have its own laws and governance. It was a former British colony that was returned to China in 1997 with a guarantee that there would be no Chinese interference in the region’s economic and political systems for 50 years, known as the “one country, two systems” principle.
Nick Chan, a member of the National People’s Congress and digital assets advocate, was quoted as saying that the city is free to pursue its own aspirations as long as there are no violations of “the bottom line of not jeopardizing financial stability in China.” .
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On Feb. 20, Hong Kong’s Securities and Futures Commission (SFC) outlined a new crypto licensing regime that suggested all centralized exchanges operating in the region must be licensed with the regulator.
It also proposed allowing retail traders access to licensed cryptocurrency trading platforms, with public feedback highlighting that being denied access to crypto markets could push Hong Kongers to trade on unregulated overseas platforms.
The new regulatory push has prompted many crypto companies to seek expansion into the city. Most recently, exchange Huobi Global announced that it would seek a local license and plan to open a new Hong Kong-only exchange with a focus on institutional and high-net-worth individuals.
