In recent months, Hong Kong has made no secret of its ambition to become a major hub for the crypto ecosystem. To achieve this, the Chief Executive and the Legislative Council that governs the special administrative region have unveiled their plan to strengthen the regulation of the Hong Kong cryptocurrency market by the end of next year.
Hong Kong to seek to establish robust framework for cryptocurrencies over next 18 months
On the occasion of the 2024 Foresight Summit taking place in Hong Kong, David Chiu, Member of the Legislative Council of the Hong Kong Special Administrative Region, unveiled the strategic plan imagined by the executive to make the autonomous territory one of the hubs of cryptocurrency.
According to the Legislative Council member, Hong Kong is counting on strong cryptocurrency regulation to secure the future of its tech industry :
The cryptocurrency industry has made significant progress in recent years, but we are still at a very early stage. We should establish a solid exchange system and introduce stablecoin legislation soon.
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As David Chiu points out, the Hong Kong Legislative Council's efforts will focus on stablecoins. He spoke about the need for an unbreakable exchange system while mentioning that new laws regarding stablecoins are expected to be introduced soon..
Furthermore, the first steps of the plan to regulate these cryptocurrencies have already been put in place. Indeed, on July 18, The Hong Kong Monetary Authority (HKMA) has announced plans to introduce a licensing system for issuers of fiat-based stablecoins.“fiat-referenced stablecoins”.
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Hong Kong, future stronghold of crypto in Asia?
In order to carry out full-scale tests around the issuance of these cryptocurrencies, Hong Kong launched a sandbox environment in which it invited several participantsAmong them, a company linked to a major Chinese retailer, a local fintech, or an entity owned by Standard Chartered Bank, Animoca Brands and Hong Kong Telecommunications.
All stakeholders will be subject to an evaluation process in the coming months. Note that their participation does not guarantee that they will be granted a license to issue stablecoins in Hong Kong. One of the participants, Jingdong Coinlink Technology, has announced that it is keen to issue a stablecoin pegged to the Hong Kong dollar.
In China, cryptocurrency transactions have been banned since 2021. This initiative and the announcement of the plan to regulate cryptocurrencies underline the authorities' desire to make Hong Kong a true Eldorado of cryptocurrencies in East Asia.
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Last April, Several Bitcoin spot ETFs had been authorized on Hong Kong soiljust months after they were approved on American soil. At the same time, spot Ethereum ETFs had even been authorizedshowing that Hong Kong could be a precursor compared to the United States, which only admitted them at the end of July.
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Source : Foresight 2024
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Surprised by the rise of crypto-assets in the late 2010s, I started to closely follow this sector that fascinates me to the highest degree. When I am not in football stadiums, rugby or handball halls, I work on writing relevant articles about cryptocurrencies and more broadly, Web3.
Zacharie Tazrout
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