In a major move to establish itself as a crypto hub, Hong Kong plans to allow retail investors to trade certain digital currencies on authorized exchanges. This move contradicts China’s stance on crypto-related transactions being totally banned and the US cracking down on crypto industry.
While there was no mention of which large-cap tokens would be allowed, the Securities and Futures Commission (SFC) spokesperson said it would likely be Bitcoin and Ether, two of the largest digital assets by market value.
Hong Kong’s securities and futures markets regulator announced safeguards such as knowledge tests, risk profiles and reasonable exposure limits.
SFC also announced that the consultation period ends on March 31 and the goal is to allow retail trade from June 1.
Currently, the city’s framework for cryptocurrency exchanges is voluntary, restricting them to clients with portfolios of at least HK$8 million.
In late October 2022, Hong Kong took steps to legalize retail investor cryptocurrency trading.
The Hong Kong government has already allowed ETFs to invest in CME Group (CME) Bitcoin and Ether futures and also sold inaugural digital green bonds starting in February.
In mid-February, Interactive Brokers (IBKR) launched cryptocurrency trading in Hong Kong in collaboration with OSL Digital Securities.
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Related reading: Last week bitcoin finished the week ~14% higher compared to broader equity markets that saw lower sentiment on concerns about the future of Federal Reserve rate hikes.
According to CoinMarketCap data, the two largest tokens (Bitcoin and Ether) by market cap contributed to a 7.1% increase in the total value of the crypto market, standing at $1.12 trillion at the time of writing.
In 2023, cryptocurrency-related ETFs saw a significant rise leading the top 10 YTD percentage gainers among unleveraged ETFs.
