Hong Kong’s Financial Secretary Paul Chan said that the government has completed its crypto regulation framework, which will come into effect in June 2023.
Speaking at the POW’ER Web3 Summit on Jan. 9, Chan said that the legislative framework needed to issue licenses to virtual asset providers has been finalized.
“We have recently completed the legislative work for licensing virtual asset service providers and the new measure will come into effect in June.”
According to Chan, the government’s move to finalize the regulation guideline will provide clarity for many startups looking to set up their headquarters in Hong Kong.
He added that the regulatory requirements for virtual asset providers will be similar to what is currently applicable to traditional financial institutions. Specifically, exchanges will be required to detail how they plan to combat money laundering and enforce investor protection.
Secretary Chan said that Hong Kong will continue to support the development of the Web3 industry in the region, as it aims to become a regional hub for crypto innovation.
Hong Kong becoming pro-crypto
Despite the Chinese government’s anti-crypto stance, Hong Kong has taken steps to become an outlier-promoting crypto innovation. According to former BitMEX CEO Arthur Hayes, “Hong Kong wants crypto back.”
Earlier in June 2022, Hong Kong classified NFTs as financial assets, stating plans to regulate them as an investment scheme. The government also completed the pilot test of its Central Bank Digital Currency (CBDC) project.
In addition, the Securities Regulatory Commission recently approved the listing of two exchange-traded funds (ETFs) on the Hong Kong Stock Exchange.
Secretary Chan added that the government is working to tokenize its green bonds and implement a cross-border application for the central bank digital currency eHKD.
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