The Chinese government is quietly backing Hong Kong authorities in their bid to turn the region into a cryptocurrency hub, Bloomberg reports.
Sources said that officials in Beijing had been frequent guests at industry events in recent months. The stance of the Chinese authorities was cordial; they readily shared business cards and WeChat contacts, the agency’s sources added.
Within the local community, there is confidence that all this “eliminates doubts about Beijing’s attitude toward Hong Kong’s efforts to become a cryptocurrency centre.” The central authorities intend to use the jurisdiction as a testing ground for digital assets amid the country’s tough policy toward them, experts say.
In October 2022, media reported on plans by the Hong Kong Securities and Futures Commission (SFC) to allow retail investors to invest directly in cryptocurrencies.
Subsequently, Hong Kong authorities made amendments to the Anti-Money Laundering and Counter-Terrorist Financing Law, extending its reach to virtual asset service providers from 1 June 2023.
At the start of 2023, the territory’s Financial Secretary Paul Chan stated that it was ready to welcome cryptocurrency companies from around the world.
On 20 February, the SFC launched public consultations on new requirements for operators of platforms trading digital assets.
Several major crypto firms, including Huobi, Gate.io, OKX and Bitget, have already announced their intention to obtain licenses under the proposed rules.
“The shift in Hong Kong’s attitude toward the crypto industry indicates that the central government of China has approved granting pilot status to certain promising experiments,” commented Justin Sun, founder of Tron, in January.
Back in October 2022, former BitMEX CEO Arthur Hayes suggested the possibility of China’s return to the digital assets industry via Hong Kong.