Hong Kong’s Crypto Industry Draws In Mainland China Businesses
While Beijing has outlawed Bitcoin assets for domestic financial institutions in Mainland China, according to South China Morning Post, several of these organizations are mulling over plans to establish new, related businesses in Hong Kong.
According to the report, many Mainland Chinese banks, family offices, and other suppliers of financial services are thinking about launching or reviving virtual asset initiatives in the metropolis. Offering cryptocurrency services is one of these endeavors.
The report quoted Robert Lui, Hong Kong Digital Asset Leader at Deloitte China, who said he was contacted by his “friends in the mainland” while inquiring “whether their virtual asset businesses can come to Hong Kong.”
The Hong Kong government recently declared that it will undertake discussions on letting retail investors invest on licensed platforms and opening up to the possibility of virtual asset futures exchange-traded funds (ETF).
The authority said that it would follow the lead of the Chicago Mercantile Exchange and initially permit only ETFs tied to Bitcoin and Ether futures to be listed. Additionally, a public forum will be held to discuss the best way to open the cryptocurrency market to retail investors.
The Hong Kong Financial Services and Markets Authority has also indicated that it is interested in conducting further assessments of the legality of smart contracts and the property rights associated with tokenized assets, and it is also considering a variety of pilot projects to investigate the feasibility and potential advantages of digital assets and their uses in the financial markets.
These initiatives are said to include the issuance of NFTs during Hong Kong Fintech Week 2022, the tokenization of green bonds, and the creation of a digital currency by Hong Kong’s central bank (CBDC).
Furthermore, the government regulator has stated that it is prepared to “engage with digital asset exchanges globally” and has extended an invitation to such exchanges to “set foot in Hong Kong for new business opportunities” under the new licensing framework for VA Service Providers, under its new VASP licensing regime.