As the crypto market grows and investors‘ interest in it grows, more governments are either joining the bandwagon already or beginning to think about allowing their citizens to invest in cryptocurrencies.
As they adopt a different approach from the government of mainland China, Hong Kong’s regulators are considering allowing individual investors to actively participate in investing in crypto assets, South China Morning Post said on October 17.
The potential shift in thinking is occurring as Hong Kong loses financial technology talent, which is harming the territory’s reputation as a center for the crypto business and favoring Singapore, its primary rival.
In keeping with a “goal of growing Hong Kong into an international virtual assets center,” as the authorities put it, the Hong Kong government previously said it will be releasing its new policy statement on cryptocurrencies during this year’s FinTech Week.
One country, two systems
The Securities and Futures Commission (SFC) director of licensing and head of the fintech unit Elizabeth Wong stated that the “one country, two systems” tenet was the foundation of “Hong Kong’s financial markets” during a panel discussion at InvestHK on October 17.
Wong noted that the sector has become more compliant while speaking about the SFC’s consideration of allowing retail investors to “directly invest into virtual assets” and stated that:
“We’ve had four years of experience in regulating this industry. (…) We think that this may be actually a good time to really think carefully about whether we will continue with this professional investor-only requirement.”
China’s crypto ban
A Chinese court recently declared that interested investors can still trade cryptocurrencies, as long as they are recognized as virtual assets and do not act as money. China has a national prohibition on crypto services, but there are exceptions.
Additionally, according to research released on October 20 by bitcoin analytics platform Chainalysis, China has maintained its position among the top ten nations leading in cryptocurrency adoption for the past two months.
Recall that China banned cryptocurrency trading and mining last year on the grounds that the sector threatened the nation’s financial stability, which caused a sharp decline in the price of Bitcoin (BTC) at the time.
