Hong Kong Seeks to Legalize Retail Crypto Trading in 2023: Report
Hong Kong’s authorities are planning to legalize crypto retail trading through a mandatory licensing program, which is expected to be introduced in March 2023, according to Bloomberg. The move comes as a part of Hong Kong’s broader plan to become a crypto hub after years of political turmoil.
Hong Kong to Introduce a Mandatory Licensing Program for Crypto Platforms in March 2023
Hong Kong is looking to legalize retail crypto trading in 2023, Bloomberg reported, as the city seeks to become a crypto-friendly hub following years of a conservative approach toward the digital assets space.
The city is planning to launch a mandatory licensing program for crypto platforms in March 2023, according to Bloomberg, citing people familiar with the matter. The regulators are aiming to allow the trading of major tokens though they will not endorse specific cryptocurrencies like Bitcoin or Ether, the report states.
The move comes as a part of Hong Kong’s plan to become a crypto hub and restore its status as a finance center after a massive talent exodus during the coronavirus pandemic due to political commotion. Crypto trading remains banned in mainland China since September 2021 due to concerns over crypto’s use in facilitating financial crime.
“Introducing mandatory licensing in Hong Kong is just one of the important things regulators have to do. They can’t forever effectively close the needs of retail investors.”– Gary Tiu, executive director at crypto firm BC Technology Group Ltd.
According to the report, the criteria for listing cryptocurrencies on retail exchanges is likely to include market value, liquidity, as well as the “membership of third-party crypto indexes.” The approach will be similar to the one for structured financial products, the report adds.
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Need for Regulation Grows Amid the Coldest Crypto Winter
Global regulators have been rushing to develop a solid crypto regulatory framework following an extremely difficult year for digital assets. The crypto market cap has dropped over $2 trillion in value due to a massive market sell-off and collapses of several major crypto firms.
40-year high inflation and aggressive interest rate hikes have pushed investors away from risk assets, boosting the US dollar to new peaks. On the other hand, Bitcoin and Ethereum declined more than 50% in the past 6 months.
Even Singapore, one of the most crypto-friendly countries in the world, tightened its crypto regulations following the crash of the algorithmic stablecoin TerraUSD and LUNA. The collapse disrupted the entire crypto industry, with the pair losing over $60 billion in combined market value.
Do you think China might reconsider its stance and reverse its ban on crypto trading in the future? Let us know in the comments below.