Hong Kong Regulator See Potential in DLT and Web3, Might Allow Crypto ETFs
Hong Kong’s government released a policy statement on its approach to developing and regulating the digital assets ecosystem in the city. The government said in a press release it sees significant potential in Web3 and DLT and is seeking to provide a “facilitating environment” to allow sustainable development of the digital assets sector.
Hong Kong Working on Promoting Expansion of the Digital Assets Sector
The government of Hong Kong issued a policy statement Monday, outlining its vision and approach to regulating and promoting the development of digital assets. In its press release, the government said it is working closely with local regulators to provide “a facilitating environment for promoting sustainable and responsible development” of the digital assets sector.
“We will put in place timely and necessary guardrails to mitigate actual and potential risks in line with international standards, so that VA innovations can thrive in Hong Kong in a sustainable manner.”
Thanks to its broad regulatory framework, Hong Kong can tackle and benefit from the rapid expansion of the global digital assets space market. The government said it is working on a new licensing regime to attract global digital assets exchanges to expand their businesses into Hong Kong.
The government and regulators are also conducting tests of multiple pilot projects to learn the technological advantages digital assets offer and their use cases in the financial markets. These include plans to launch non-fungible tokens (NFTs) for Hong Kong Fintech Week 2022, green bond tokenization, and central bank digital currency (CBDC). Hong Kong’s central bank said in September it plans to issue a wholesale CBDC in 2-3 years.
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Regulators Could Allow ETFs, Acknowledge Web3 and DLT Potential
Hong Kong’s government and regulators announced plans to conduct a public discussion on how to provide investors with a “suitable degree of access” to digital assets. In more specific terms, the government also said it is open to the possibility of bringing Exchange Traded Funds (ETFs) to its home market and believes distributed ledger technology (DLT) and the burgeoning Web3 could shape the future of finance and commerce.
“We recognise the potential of DLT and Web 3.0 to become the future of finance and commerce, and under proper regulation they are expected to enhance efficiency and transparency. The Government is prepared to embrace this future, and we welcome the clustering of Fintech and VA community and talents in Hong Kong, and we will promote the sustainable development of financial services across the whole VA value chain.”– Christopher Hui, Secretary for Financial Services and the Treasury
The new policy statement follows reports that Hong Kong is planning to legalize crypto trading in 2023. The move comes as the city looks to restore its finance hub status after years of political turmoil.
Do you think Hong Kong could become one of the leading crypto and Web3 hubs in the coming years? Let us know in the comments below.