Has Hong Kong Got Big Crypto Plans?

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  • Hong Kong could be working on plans to open up crypto trading to retail customers
  • The move would be in defiance of China’s rules on the matter
  • Trading platforms and assets could be legalised and regulated

Hong Kong could legalise cryptocurrency trading and work to become a cryptocurrency hub, putting it at odds with its Chinese overlords. Bloomberg reported yesterday that the country is pivoting toward a friendlier regulatory regime for cryptocurrencies with a mandatory licensing program for crypto platforms set to be in place by March next year to allow retail trading. The plans have not been made public with Bloomberg’s source being “people familiar with the matter”.

Crypto Trading Would Defy China’s Rules

Hong Kong has itself never banned cryptocurrency trading, but being ruled by China it has a de facto ban in place against all cryptocurrency activity. However, the country plans to ditch these rules and take its own path, with regulators supposedly preparing to allow listings of bigger tokens, although there will be no endorsement of specific coins like Bitcoin or Ethereum. Details and a timetable have yet to be finalised, with a public consultation due first.

Hong Kong’s push into the crypto sector comes amid a broader drive to restore its credentials as a centre of finance after years of political turmoil and Covid curbs sparked a talent exodus.

Singapore Crackdown May Have Had an Impact

When it comes to which tokens will be allowed to be listed on retail exchanges, the criteria is likely to include market value, liquidity and membership of third-party crypto indexes, similar to the approach used for structured products, such as warrants.

The news comes just a day after Singapore, Hong Kong’s traditional rival for financial business, revealed plans to hugely tighten the exposure of retail customers, including banning derivative trading and buying crypto on credit.