On Monday, Hong Kong Monetary Secretary, Paul Chan, mentioned it might be adopting a welcoming approach to digital property to regain its “quick slipping crown” of being a worldwide hub for cryptocurrency providers. However the assertion elicited many blended reactions from trade gamers, together with the billionaire Sam Bankman-Fried.
The final one yr has seen the huge exodus of a number of crypto giants from Hong Kong house. It may be recalled that Hong Kong had proposed limiting crypto trading operations to skilled traders final yr, which made many crypto entrepreneurs change their operational base to locations like Dubai and Singapore with friendlier insurance policies.
Hong Kong Appears to Have Had a Rethink
In an announcement, Hong Kong Monetary Secretary Paul Chan mentioned Hong Kong is reviewing property rights for digital property with accompanying prospects of offering a authorized framework for smart contracts.
He additionally acknowledged that Hong Kong plans to arrange “applicable laws” on key facets resembling “governance, redemption mechanism and stabilisation” of the plethora of stablecoins working inside its shores.
He additional acknowledged:
“We wish to make our coverage stance clear to the worldwide market, to exhibit our dedication to discover fintech with the worldwide digital asset neighborhood, though within the preliminary stage Hong Kong expects the underlying property to be confined to bitcoin futures and ether futures on the Chicago Mercantile Trade.”
An in depth coverage assertion will precede this course of, and the securities and futures fee will set up public session that may give retail traders a first-hand perception into the brand new coverage.
The Hong Kong Monetary Companies and the Treasury Bureau, in an announcement, mentioned:
“We acknowledge VA [virtual asset] is right here to remain, given the way it has attracted consideration of world traders and is more and more considered as a conduit for monetary improvements, to not point out the long run alternatives that will likely be opened up as VA strikes into the areas of Net 3.0 and the Metaverse.”
Sam Bankman-Fried and Different Crypto Gamers’ Reactions to the Coverage
Sam Bankman-Fried, in response to coverage, decried the incorrect timing of coverage as a result of Hong Kong appears to have misplaced a superb variety of crypto gamers since final yr.
In a Tweet, he mentioned:
“I deeply respect when policymakers interact constructively and optimistically with the individuals who matter probably the most for an trade’s course: the shoppers.”
Leonhard Weese, the co-founder of the Bitcoin Affiliation of Hong Kong, believes the brand new Coverage assertion nonetheless lacks readability for correct engagements. He mentioned he was stunned that authorities solely introduced a public session on retail crypto buying and selling slightly than an precise change of policy which might have been extra strong.
He mentioned:
“This regulatory certainty will not be being launched now by barely altering these bulletins. The legislation, as it’s proposed, is probably going going to move and it will be interpreted as excluding retail entry.”
On the Flip Aspect
Adrian Cheng, CEO of Hong Kong actual property large New World improvement, mentioned:
“Hong Kong is ‘again into the sport‘ with its ambitions outlined to develop into the worldwide digital asset centre. We imagine latest progressive insurance policies not solely have laid a strong regulatory basis in Hong Kong but additionally propelled the delivery of a world-leading digital issuance hub of world securities, which is unprecedented in different international locations.”