Hong Kong regulators intend to increase their personnel in order to “better supervise” the operations of regional providers of virtual assets.
According to a Commission report submitted on February 6, four more employees would be hired to “better supervise” the operations of regional virtual asset (VA) providers in Hong Kong.
Additionally, by enabling retail investors to trade virtual assets on regulated platforms, the additional regulation will aid in “better assessing the compliance and risk.” Written by the commission:
“This is in response to an increasing number of operators who have expressed interest in carrying on VA activities such as trading platforms and the management of VA funds.”
This occurs while a new licensing system is being implemented to enable larger retail cryptocurrency investing. Previously, according to regulations, only professional investors or retail investors with portfolios worth at least $1 million (HK $8 million) were allowed to use trading platforms regulated in Hong Kong.
The new license system was adopted as a change to the Anti-Money Laundering and Counter-Terrorist Financing Bill in December 2022. However, it doesn’t go into force until June 2023, giving local firms and government agencies time to get ready for a fresh round of industry engagement.
The region has been active in its effort to modernize its cryptocurrency sector and establish itself as a center of Web3 innovation. This strategy comprised a $500 million investment fund to encourage widespread adoption in the regional market.
Most recently, the Hong Kong Monetary Authority declared in a statement that its most recent legislation forbids algorithmic stablecoins. The authority did, however, state that it plans to create a robust regulatory framework for stablecoins that will be based on the complete backing of such assets.
