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Hong Kong on Thursday launched a new regulatory scheme that allows retail investors to trade cryptocurrency on licensed platforms, bucking the global trend of tightening rules after the industry crashed last year.
The spectacular bankruptcies in recent months of the FTX cryptocurrency exchange and several US banks focused on this sector have not deterred the Hong Kong authorities from relaxing their regulations in this area.
“Despite the potential risks, virtual assets have fundamental value,” Hong Kong Treasury Secretary Christopher Hui told AFP. “For these positive elements to be exploited, these activities must be authorized in a regulated manner”.
While Hong Kong has so far restricted cryptocurrency exchanges to customers whose wallets weighed at least 8 million Hong Kong dollars (950,000 euros), the authorization regime is changing.
As of Thursday, this new regulatory framework allows many more people to invest in cryptocurrencies and virtual assets. Until now, they were reduced to a few exchanges operating abroad, such as Binance or Coinbase, or physical outlets that offered to buy and sell tokens for cash.
With these new regulations, the authorities hope to revive the economy of the Asian financial hub, recently shaken by the massive pro-democracy demonstrations of 2019 and the health restrictions linked to the Covid-19 pandemic. Above all, observers believe that Hong Kong will become an obligatory crossing point for investors from mainland China, where cryptocurrencies are practically prohibited.
