The Securities and Futures Commission (SFC) of Hong Kong is set to release final guidelines for crypto exchanges in May. This comes after a public consultation process that received over 150 responses. The new regulatory framework will make it easier for retail investors to trade major cryptocurrencies.

Despite restrictions on investors with portfolios worth less than HK$8 million, crypto exchanges are currently allowed to operate in Hong Kong. The SFC is also running pilot projects to evaluate the potential use of digital assets in financial markets. These projects include testing the feasibility of tokenizing green bonds and creating Hong Kong’s own central bank digital currency (CBDC).

Hong Kong aims to position itself as a prominent Web3 hub in Asia, attracting interest from over 80 companies. However, there are concerns about how its lenient regulations on cryptocurrencies could affect its relationship with mainland China, which banned cryptocurrency trading and Bitcoin mining in 2017.

Despite China’s hardline stance against cryptocurrencies, it appears that the Chinese government is quietly backing Hong Kong’s ambition to become a hub for digital assets. Last October, the government of Hong Kong put forward a proposal to regulate cryptocurrencies and permit everyday investors to invest in virtual assets.

According to insiders, Chinese officials have not expressed opposition to the idea of Hong Kong becoming a centre for cryptocurrencies. In fact, representatives from the China Liaison Office have been attending crypto events in Hong Kong to learn more about the situation.

Xinxi Wang, CEO & Co-Founder of Coinut, said, “In light of these new regulations, we anticipate the emergence of a dynamic ecosystem that promotes and facilitates innovation.”

Hong Kong faces stiff competition from other countries in the region, such as Singapore and South Korea, which are also working to establish themselves as leading crypto hubs. Japan is also showing interest in adopting cryptocurrency, although it still lags behind many of its Asian counterparts in terms of adoption.


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