Hong Kong
rolled out new rules on Thursday to guide the cryptocurrency industry in the
Chinese special administrative region. Crypto exchanges operating in the jurisdiction
are now required to get licensed to offer their services to retail traders.
Agency
France Presse reported that the new rules include provision to protect
investors by taskingexchanges to asset their clients’ level of knowledge aboutcryptocurrencies before onboarding. Exchanges
are also to limit investors’
risk exposure with tradablecryptocurrencies confined
tothose with large market capitalizations such as Bitcoin.
On the
other hand, the regulation rules out stablecoins, crypto derivatives and
staking products. This means that exchanges in the jurisdiction will only be able to offer crypto sport
trading to their clients.
However,
crypto firms in Hong Kong have a one-year transition period before the license
requirement will be enforced, the outlet said. Already, Hong Kong’s financial regulator has
received ‘a handful of applications.’
In March,
Christian Hui, Hong Kong’s Secretary for Financial Services and the Treasury,
disclosed that over 80 foreign and Mainland China cryptocurrency firms had
expressed interest in obtaining the required license in
order to set up local branches in the jurisdiction. This is even as reports of the financial hub’s plan to legalize
digital assets first emerged late last
year.
Meanwhile,
Finance Magnates previously reported that digital asset companies such as BitMEX and CoinEx launched customized services for Hong Kong users ahead of the new crypto regime. On Thursday, First Digital Group, a financial
institution that offers services such as custody, clearing and settlement to
the digital asset industry, also announced that it is launching FDUSD, a US dollar stablecoin.
The stablecoin is to be issued by the Group’s trust company registered in Hong Kong. However, in line with the new crypto rules, the stablecoin will not be available
to retail investors in the region.
Crypto in Asia
With the
launch of the new crypto rules, Hong Kong has achieved a milestone in its
efforts towards becoming a top crypto destination. This is a stark contrast to China’s continued hard
stance against digital assets.
Across the wider Asian
region, financial watchdogs are also making moves to put the cryptocurrency
industry under their control. Japan starting this month plans to enforce strict
anti-money laundering measures on cryptocurrency…
