Hong Kong Consider Allowing Retail Investors To Invest Directly In Virtual Assets

October 21, 2022 - Around 3 mins mins to read

Hong Kong is considering allowing retail investors to invest directly in virtual assets amid a talent exodus that is hollowing out the city’s crypto industry.

According to SCMP, Hong Kong is considering allowing retail investors to “directly invest in virtual assets” amid strong cryptocurrency migrations. It will mark a fundamental shift in the past four years, which have been limited to institutional and professional investors.

As can be seen, the city’s official stance on cryptocurrencies is separate from that of mainland China.

The “one country, two systems” principle “forms the basic foundation to Hong Kong’s financial markets”, and the fact that the city can introduce its own bill to regulate cryptocurrencies “shows just how separate Hong Kong is from the mainland,” Elizabeth Wong, director of licensing and head of the fintech unit of the Securities and Futures Commission (SFC), said during a panel discussion held by InvestHK on Monday.

“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,”
Wong said, adding that the industry has also become more compliant.

The SFC is now considering allowing retail investors to “directly invest into virtual assets”, Wong said. That would mark a shift from the SFC’s stance over the past four years, which limits crypto trading on centralised exchanges to professional investors – defined as individuals with a portfolio of at least HK$8 million ($1 million).

Earlier, the Hong Kong government announced that it would make a declaration to become the world’s virtual asset center in the upcoming financial week. The country is worried about falling behind Singapore and trying to catch up.

Once the birthplace of some of the largest cryptocurrency platforms in the world, the country has recently seen the migration of related businesses, partly due to the city’s strict travel control measures Covid-19.

According to Wong, the regulator is still examining the laws to see if it should permit ordinary investors to invest in exchange-traded funds (ETFs) that have exposure to virtual assets.

A change to the city’s anti-money-laundering policy will make it essential for all cryptocurrency trading platforms to obtain licenses. This new regulation will go into effect soon. In a consultation on the bill later this year, the SFC would ask the public for feedback on permitting retail investors to make direct cryptocurrency investments, Wong added.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Website: coincu.com

Foxy

CoinCu News

Market