Bitcoin, Ethereum, Litecoin and 7 other popular cryptocurrencies have so far met the conditions set by the Securities and Futures Commission (SFC) of Hong Kong for their exchange and retail trading in the city.
Hong Kong, one of two special administrative regions in China, has been working on creating a favorable regulatory framework for cryptocurrencies to enable businesses and investors to access the new opportunities in the industry while regaining its status as a global financial and technology hub. Although Hong Kong is part of the People's Republic of China, it enjoys a high degree of autonomy under the “one country, two systems” principle, which has allowed it to ignore the harsh restrictions that the Chinese government maintains on the crypto industry and to establish more favorable conditions to encourage their growth and development.
However, local authorities have also paid attention to the security and protection needs of crypto investors, establishing a series of criteria to open the doors to the crypto industry in a safe and responsible manner.
In this regard, Hong Kong, which will lift its restrictions and will allow retail investors to access cryptocurrencies starting June 1 of this year, announced in February that only popular cryptocurrencies that are included in at least two investable indices from recognized companies are eligible for trading within the city/region.
Chinese media outlet CCTV covered the news, reporting during a transmission Live on the new regulatory measures of the SFC that will open the doors to retail trading of digital assets such as Bitcoin.
Currently only 10 popular cryptocurrencies, between them Bitcoin, Ethereum, Polkadot, Litecoin, Cardano, Bitcoin Cash, Avalanche, Polygon, Solana and Chainlink, are compliant and eligible for retail trade in Hong Kong.
Hong Kong SFC's conditions for cryptocurrencies
First, Hong Kong will require cryptocurrency service operators who are currently offering crypto-related services in the city or have plans to do so in the future, apply for a license from the Securities and Futures Commission Hong Kong. Likewise, those operators that are providing virtual asset services in the city have a period of 9 months from June 1 to submit their application for a license.
The SFC said that only licensed crypto service operators will be allowed to continue operating in Hong Kong.
As reported by this outlet, Hong Kong's new regulations for cryptocurrencies come as other jurisdictions, such as the United States, the world's leading power, are losing appeal for cryptocurrency companies due to a lack of regulatory clarity and increasing pressure from the SEC on the industry.
In March, Hong Kong Secretary for Financial Services and the Treasury Christian Hui commented on the city’s plans to boost the development of cryptocurrencies, blockchain technology and Web3, which has attracted the interest of over 80 crypto companies that now want to set up operations in the city.
Continue reading: Hong Kong attracts over 80 crypto industry companies
