Hong Kong’s Ambition To Be A Crypto Hub Quietly Backed By The Beijing

Key Points:

• Hong Kong is in the process of consulting to legalize a form of retail cryptocurrency trading in the territory.
• The mainland government in Beijing is a regular guest at meetings on cryptocurrency issues, and they endorse the idea subtly.

The mainland government in Beijing may be covertly encouraging the idea as Hong Kong gets ready for a consultation process that might eventually authorize a type of retail crypto trading in the territory, according to Bloomberg.

In October, Hong Kong rolled out the red carpet for crypto businesses to help revive the struggling financial hub. Signs are emerging that the push has implicit backing from Beijing, giving mainland Chinese companies an incentive to return.

Representatives from China’s Liaison Office and other officials have been frequent guests at the city’s crypto gatherings over the past months, exchanging business cards and WeChat details which are familiar with the company. In this matter, the person asked to remain anonymous to discuss personal information.

Residents said the meetings were friendly, with officials checking developments, requesting reports, and sometimes making follow-up calls. The Liaison Office, the mainland’s top agency based in Hong Kong, did not respond to a request for comment.

Some stakeholders think this can be seen as an endorsement of Hong Kong’s efforts to become a crypto hub, with China’s Special Administrative Region using its own legal and market system its separate market to serve as a testing ground – in the same way, that Hong Kong did China’s first test of open markets in the 20th century.

“As long as one doesn’t violate the bottom line, to not threaten financial stability in China, Hong Kong is free to explore its pursuit under ‘One Country, Two Systems,”

Bloomberg quotes Nick Chan, a National People’s Congress member, and a crypto lawyer, as saying.

On Monday, Hong Kong’s Securities and Futures Commission (SFC) made its first push to open the door to retail crypto trading, beginning a consultation process for Virtual Asset Service Providers (VASPs) seeking a license to provide trading services for retail.

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