Hong Kong has lost its reputation as a fintech hub. Hence, the government has proposed allowing ordinary investors to trade cryptos and exchange-traded funds.
After the city, which had previously considered restricting bitcoin trade to professional investors, drew strong criticism for planned legislation for digital assets that would have impeded innovation, several start-ups have gone to other markets, such as Singapore and Dubai.
Hong Kong one Step Closer to Digitalization
Financial Secretary Paul Chan announced in a keynote speech at the Hong Kong Fintech Week conference that authorities will begin a consultation process on providing ordinary investors with sufficient access to virtual assets. To demonstrate our resolve to explore fintech with the international virtual asset community, they want to clarify their policy stance to the global market.
In addition, the government will investigate the legality of so-called smart contracts, which rely on pre-programmed data to execute transactions and automatically value token ownership. Insiders in the industry anticipated that these steps would pave the way for real estate security token sales (STOs). STOs are tokens on the blockchain that reflect ownership stakes or grant investors the right to income or dividends from physical assets.
Andy Meehan, head of APAC at US cryptocurrency exchange Gemini, said a recent announcement could align Hong Kong’s rules with Singapore’s. He asserts that business participants want to see uniformity in the global regulatory framework since, absent that, unscrupulous actors would have the chance to exploit loopholes in jurisdictions with less rigorous standards.
The central bank of Singapore has limited the promotion of cryptocurrency services in public areas and allowed individual investors to deal in cryptocurrencies. However, the public has been discouraged from doing so. It is also suggesting fresh actions. The most recent move to authorize retail bitcoin sales in Hong Kong would further set Hong Kong apart from mainland China, where the government prohibited cryptocurrency trade completely.