Hong Kong's Securities and Futures Commission (SFC) is in the process of approving new licenses for cryptocurrency exchanges to legally operate in the region before the end of the year.
Julia Leung, CEO of the SFC, shared several details with local media Hong Kong 01 about the ongoing licensing reviews for cryptocurrency platforms. Leung also spoke about the need to improve the city’s regulatory framework to attract more cryptoasset companies to the local market.
Hong Kong has long been focused on becoming an innovation hub for the crypto market. However, its regulatory approach to digital assets had been considered too strict for Web3 companies. As such, Leung’s recent statements suggest a potential significant shift in the direction the city has taken to regulate the crypto market and foster blockchain technology innovation in the region.
Hong Kong to open doors to new cryptocurrency companies
In the recent interview Leung told local media that 11 cryptocurrency companies, which have applied for licenses to operate as crypto-asset exchanges, could receive their respective licenses by the end of this year. Leung assured that these applications have already gone through on-site reviews and are awaiting approval.
Recently, the Commission approved the operations of HKVAX, which has become the third exchange to receive the green light in the city, raising expectations about the opening of the market to more industry participants. Leung highlighted that the approval of new platforms before the end of the year is expected to strengthen the crypto ecosystem in the region. If these applications are approved, the perception towards Hong Kong's strict approach could change, which until now had been the subject of criticism.
Some experts have pointed out that the city’s current regulatory regime is too restrictive, and that this could discourage international companies in the crypto industry from establishing themselves in Hong Kong.
“We should embrace financial innovation, promote the development of the regulatory system for virtual asset trading platforms, support the tokenization of traditional products, utilize regional chains and Web3 technologies, and promote the establishment of a responsible and secure financial technology ecosystem.”, Leung said.
Hong Kong moves towards an ecosystem of opportunities
Despite the current challenges, Leung has expressed his commitment to improving the cryptocurrency ecosystem in Hong Kong.
The SFC is seeking industry views on regulating cryptocurrency custody and OTC trading services, which could open up new opportunities for greater market participation.
Experts have commented that this proactive approach is essential to help Hong Kong and its financial regulator address investor concerns and foster a more inclusive environment for cryptocurrency companies.
The new licensing landscape and the revised regulatory framework offer an opportunity for Hong Kong to regain its status in the crypto industry. Thus, with the SFC’s commitment and the active participation of the crypto community, the region could consolidate itself as an international benchmark in the cryptocurrency space.
