Hong Kong eases crypto regulation and revises stance on Bitcoin ETFs

The Hong Kong Financial Services and Treasury Bureau published a statement on relaxing restrictions on cryptocurrencies and its willingness to engage with virtual asset service providers (VASPs).

According to the document, the Hong Kong Special Administrative Region invites VASPs to cooperate. Authorities are currently discussing a new licensing regime for providers of virtual asset services.

The regulator noted that Hong Kong is also open to cryptocurrency-based exchange-traded funds (ETF), and pledged to provide the appropriate regulatory mechanisms and investor protections.

“The Hong Kong Securities and Futures Commission (SFC) is actively developing licensing rules for ETFs that provide access to popular virtual assets,” said Deputy Chief of the SFC Julia Leung.

In her words, the Commission deems it necessary to regulate tokenised securities in the same way as existing financial instruments. The SFC no longer classifies them as complex products due to their blockchain-based issuance.

The document also mentions studying pilot projects for issuing NFT, tokenising green bonds and launching a digital Hong Kong dollar.

“We recognise the potential of blockchain and Web3 as the future of finance and commerce. With proper regulation, they can enhance efficiency and transparency. The government is ready to embrace this future. We welcome the fintech and virtual assets community in Hong Kong,” said Christopher Hui, Secretary for Financial Services and the Treasury.

Earlier media reported about the SFC plans to allow retail investors directly invest in cryptocurrencies. Currently such an opportunity is available only to professionals with portfolios of at least $1 million.

Earlier, former BitMEX chief executive Arthur Hayes spoke about China’s plans to return to the crypto industry with the help of Hong Kong.

He sees the liberalisation policy as part of Beijing’s strategy to soften its stance toward digital assets. In Hayes’s view, the next bull market will begin with China returning to the cryptocurrency market.

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