China May Support Hong Kong’s Crypto Plans, Report

The latest reports show that the Chinese government might not be opposing Hong Kong’s crypto ambitions.

Before now, Hong Kong announced its move to legalize and regulate digital currency trading for retail investors. The move by Beijing to support Hong Kong’s aspirations to become a crypto hub contradicts China’s stance on matters related to digital currencies in the mainland.

The main idea is to let them invest directly in digital assets. Beijing now supports this move, and that contradicts its ban on digital currencies set in late September 2021.

China Supports Hong Kong’s Digital Ambitions

Based on a February 20 Bloomberg report, some of the China Liaison Office representatives together with other officials have attended the digital currency meetings in Hong Kong. Notably, they want to follow up and deeply comprehend current events. Based on the report, both parties enjoy a great rapport during these meetings.

Local digital currency business operators close to this case believe that China wants to use Hong Kong as a conduit to access crypto markets. As highlighted by a digital asset lawyer and National People’s Congress member Nick Chan, the city is allowed to execute the crypto activities if it avoids any violations that threaten China’s financial stability.

Hong Kong is a major city in China, known for its position as a Special Administrative Region of the Asian nation. The city strictly follows the attractive policy of an open market that applies to all of its current trades and investments.

Furthermore, Hong Kong has followed a Basic Law known as the one country, two systems since 1997. Interestingly, the system lets the city head matters related to trade, finance, and the nation’s economy. Additionally, via the Basic Law, Hong Kong can head cases about international trade agreements and all relevant international organizations using the official name, Hong Kong, China.

New Crypto License Regime From Hong Kong’s SFC

Hong Kong’s Securities and Futures Commission (SFC) introduced a new digital currency license regime on February 20. Based on the official announcement, all centralized exchanges in the region have to possess a license from the regulator to conduct crypto services efficiently.

It also said that retail traders could access licensed digital currency platforms. SFC thinks that banning Hong Kong citizens from accessing the crypto market might compel them to trade mostly on unregulated international platforms.

The most recent rules of Hong Kong’s SFC appear to have triggered a high drive among most of the digital asset platform owners to expand to the region. Among the list of crypto exchanges that consider expansion is Huobi Global. The company announced that it is ready to acquire a local license that will enable it to offer crypto services in the city.

The firm also noted that its intention to develop a new exchange strictly for the Hong Kong business is already underway. Furthermore, it can readily reach institutions and high-net-worth individuals to contribute more to its growth via the exchange.