In less than a month, Hong Kong's regulator is opening up opportunities for cryptocurrency companies to operate in the region while warning that measures to regulate them will be tough.
The announcement was made by Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, at the Wealth Asia Summit hosted by Bloomberg.
Hong Kong welcomes cryptocurrencies, he said, but they should not expect things to be easy. "We will let them create the ecosystem here and that actually brings a lot of excitement. But that doesn’t mean light-touch regulation."
According to Beincrypto, Hong Kong intends to launch a new licensing regime for crypto service providers on June 1, as well as allow retail investors to trade major crypto assets.
It is worth noting that trading in mainland China remains banned due to restrictions imposed by Beijing. Yue recalled that banks are expected to introduce the maintenance of cryptocurrencies, and special guidelines are being prepared for them. In addition, the Securities and Futures Commission (SFC) will soon report the results of the planned retail participation.
Hong Kong's new regulatory regime for the crypto sector includes the issuance of licenses for crypto platforms, including a compulsory license regime for stablecoins.
Experts warn that obtaining a digital asset provider license in Hong Kong will be much more difficult than elsewhere. It will be mandatory to verify tokens offered for sale in Hong Kong. There will also be background checks on issuers and developers. Market making will not be open and crypto exchanges will have to provide full insurance to cover any risks or losses.
We previously reported that Deus Finance's DeFi protocol claimed to have been hacked.