Experts Concerned Slow Regulatory Progress Could Stifle Hong Kong's crypto Growth
As Hong Kong positions itself as a global cryptocurrency center, experts are cautioning that the city's gradual regulatory stance may impede its advancement in the fast-paced digital assets industry. In a recent interview, First Digital Trust, a crypto firm based in Hong Kong, highlighted concerns about the sluggish regulatory pace and the necessity for quicker adaptation to stay abreast of industry advancements.
Currently, Hong Kong only boasts two fully licensed virtual asset trading platforms, namely Hash Blockchain and OSL Digital Securities. Several other cryptocurrency exchanges are in limbo awaiting their licenses, reflecting the city's meticulous approach to industry regulation.
crypto Exchanges in Hong Kong Await Regulatory Approval
Vincent Chok, the CEO of First Digital, explained the rationale for this cautious progression, stating that Hong Kong prioritizes safeguarding investors over swift regulatory actions. "It is understandable that Hong Kong’s regulatory approach is more conservative and slower compared to other jurisdictions, given its focus on safeguarding investors," Chok emphasized.
"We hope to see regulation move faster to ensure Hong Kong does not fall behind the fast-paced development of the industry," he added. In a bid to tighten regulatory control, Hong Kong criminalized the operation of an unlicensed virtual asset trading platform as of June 1.
The Securities and Futures Commission (SFC) also issued an "alert list" pinpointing suspicious and unlicensed trading platforms that might be targeting Hong Kong investors. These measures aim to fortify market integrity while protecting consumers.
Progress has been noticeable in stablecoin oversight, with the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) releasing findings on local stablecoin regulation. Subsequently, Jingdong Coinlink Technology Hong Kong Limited, a JD Technology Group subsidiary, disclosed plans to issue a stablecoin pegged 1:1 to the Hong Kong dollar under the HKMA's sandbox program.
Hong Kong's Increasing Competition
Nevertheless, Hong Kong faces stiff competition from other jurisdictions like Dubai, which has been actively advancing in the stablecoin domain. Tether, the world's leading stablecoin provider, announced intentions to unveil a stablecoin pegged to the UAE dirham in collaboration with UAE-based partners.
Noteworthy is the emergence of companies offering crypto custody services in the region. The United Arab Emirates recently granted Standard Chartered permission to deliver such services, commencing with bitcoin and Ether.
Hong Kong recently introduced its inaugural batch of ETFs concentrated on cryptocurrencies, signaling potential rivalry for the popular bitcoin products in the United States. Harvest Global Investments Ltd., an affiliate of China Asset Management, and a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co., launched bitcoin and Ether ETFs in the city on Tuesday.
