Bloomberg believes that Beijing’s mainland administration may be covertly embracing the concept as Hong Kong gets ready for a consultation process that might lead to the eventual legalization of a type of retail crypto trading in the territory.
Bloomberg claims that representatives from China’s Liaison Office have frequently attended crypto events in Hong Kong. With specific projects, the atmosphere of their visits and follow-up calls has been cordial.
The Special Administrative Region of China is leveraging its distinct legal structure and markets to serve as a testing ground, just like Hong Kong was China’s first test of open markets in the 20th century, according to several stakeholders. Hong Kong is pushing to become a crypto hub.
According to Nick Chan, a member of the National People’s Congress and a cryptocurrency lawyer, “Hong Kong is free to pursue its own pursuit within ‘One Country, Two Systems’ as long as one doesn’t break the bottom line, to not undermine financial stability in China.”
The Securities and Futures Commission (SFC) of Hong Kong started a consultation process for Virtual Asset Service Providers (VASPs) looking for a license to offer trading services to retail customers on Monday in an effort to open the door to retail cryptocurrency trading.
Among of the conditions the SFC suggests include building up a risk profile for clients to make sure their exposure is “appropriate,” as well as a due diligence procedure on tokens before to listing, which would make only pre-approved tokens available to traders.
Following a lengthy consultation process that was finally completed by the SFC, exchanges will be able to cater to professional investors (those whose net worth exceeds $1 million) starting on June 1.
When the SFC will wrap up its consultations on granting access to retail investors is unknown.
