key takeaways
- Hong Kong is gearing up to become a crypto hub.
- The Chinese government is giving subtle indications of approval of the plan.
- Yesterday, a Hong Kong regulatory body outlined the conditions under which retail investors would be able to buy cryptocurrencies.
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China is dipping back into the world of cryptocurrencies by allowing Hong Kong to open up to the market.
One country, two systems
The Chinese government seems ready to relax its draconian stance against cryptocurrencies, at least in Hong Kong.
According Bloomberg, Chinese officials have been giving subtle hints of approval of Hong Kong’s recent efforts to position itself once again as a crypto hub. The report indicates that while Beijing is nowhere close to re-legalizing cryptocurrency in mainland China, it appears willing to let the city develop its cryptocurrency industry.
The Chinese Liaison Office’s participation in the recent Hong Kong crypto meetings has been one of many good signs. Officials have reportedly been exchanging business cards and contact details with cryptocurrency industry leaders in a friendly manner, even going so far as to make follow-up calls on the projects.
Another way the Chinese government has shown its approval is through the city’s explicit endorsement. People’s Bank of China Governor Yi Gang recently delivered speeches on China’s central bank digital currency and the government’s close cooperation with Hong Kong at key Hong Kong events.
“As long as one does not violate the bottom line, so as not to threaten financial stability in China, Hong Kong is free to explore its own quest under ‘One Country, Two Systems,'” Nick Chan, a member of the National People’s Congress, told Bloomberg. .
The Hong Kong Securities and Futures Commission proposed yesterday in a consultation paper to allow retail investors the ability to trade large-cap cryptocurrencies on licensed exchanges, provided they meet various requirements. The implementation of knowledge tests, risk profiles and reasonable limits on permitted exposure would be necessary for exchanges to obtain such licences.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
