A government official confirmed the city’s crypto commitments at this week’s Hong Kong Web3 Festival, which aims to become a fully regulated crypto hub that attracts investment and Web3 startups.
On April 12, Finance Secretary Paul Chan Mo-po reiterated that proper regulation and oversight are paramount.
“I think we have all learned from recent events that good regulation is essential to create a sustainable development environment and a more ideal space for development.”
Hong Kong to regulate DeFi
according to report, the Hong Kong Securities and Futures Commission (SFC) also wants to regulate decentralized finance. The agency believes DeFi platforms will require a license. This means that it is not DeFi per se.
Keith Choy, head of the SFC’s intermediation division, said DeFi should be seen the same as CeFi (centralized or traditional finance).
“As such, to the extent that DeFi activities fall within securities and futures, they are subject to the same regulatory requirements that apply to traditional financial activities.”
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New regulations, which come into force in June, require all Hong Kong cryptocurrency exchanges to be licensed by the SFC. However, the licensing process is very strict and has strict requirements for the tokens that can be listed.
Nevertheless, local banks are opening their doors to cryptocurrencies, which is not the case in the West. Earlier this week, Hong Kong’s largest online bank announced that it would offer transfers and conversions between crypto and fiat currencies.
ZA Bank will act as a clearing bank for its clients, allowing them to withdraw from their cryptocurrency deposits on exchanges in Hong Kong, Chinese and US currencies, said CEO Ronald Iu.
Not for Chinese retailers
However, the Hong Kong crypto market will not be available to mainland Chinese retail traders due to Hong Kong regime restrictions.
It provides a path for Chinese banks, institutions and companies to legally enter the crypto market.
Currently, there are only two fully licensed cryptocurrency exchanges in Hong Kong, HashKey and OSL.
Hong Fang, President of OKX, is optimistic, saying, “The situation is very fluid, but we see Hong Kong as a very important hub for our team, along with our US and other offices.”
OKX has announced plans to expand its presence in Hong Kong by applying for a virtual asset license in late March.
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