The Hong Kong Monetary Authority (HKMA), amid competition with Singapore for the title of the world cryptocurrency hub, will revise the legislation on cryptocurrencies by July.
The Central Bank of Hong Kong is developing rules for regulating stablecoins as a payment instrument. The management intends to take a tough approach to the issue, since such assets pose “possible risks to monetary and financial stability.”
HKMA is closely following the development of cryptoassets and “would like to actively share” their views with the community. The department believes that it is time to create rules governing transactions with digital currencies to protect investors.
Regulators in Hong Kong, like their counterparts around the world, are moving to tighten their oversight of the cryptocurrency industry, citing extreme asset volatility and frequent cases of fraud. HKMA CEO Eddie Yue
promised apply an approach to regulation of the cryptoindustry based on the rule of “what risk, this is the level of supervision.”
In Hong Kong, as a special administrative region of China, an “opt-in” rule has been in effect for some time, allowing any local cryptocurrency exchange to obtain a license in the presence of share tokens that are analogous to a security. A similar registration rule is now in effect in the United States.
According to ONC Lawyers consultant Joshua Chu, this model is ineffective, and cryptocurrency exchanges and the government should consider changing the policy. The same opinion is shared by the CEO of the FTX exchange Sam Bankman-Fried (Sam Bankman-Fried). He believes that separate regulation rules need to be developed for each type of cryptocurrency.
At the end of 2021, it became known that the Securities and Futures Commission (SFC) of Hong Kong is reviewing the rules for transactions with cryptocurrencies. The agency promised to allow individuals, albeit with restrictions, to invest in cryptocurrency ETFs.
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