Hong Kong’s Securities and Futures Commission (SFC) has proposed crypto regulations as a way to regulate the various cryptocurrency trading exchanges already operating in the country and thus protect retail investors.
October 2018 | AtoZMarkets – Hong Kong’s Securities and Futures Commission (SFC) is making plans to introduce formal crypto regulations to protect retail investors and traders amid a growing demand for cryptocurrencies like Bitcoin.
Regulators SFC Proposes Crypto Regulatory Framework
In an interview with the Hong Kong newspaper on Monday, the South China Morning Post (SCMP), the SFC’s outgoing chairman, Carlson Tong Ka-shing said, that unlike China, the watchdog is not looking to place a ban on crytocurrencies exchanges.
He added according to the news source, that a total ban is not “necessarily the right approach”. The senior official was reported as saying:
“We do not think imposing a total ban on these platforms is necessarily the right approach, and it will not work in today’s internet world when trading can cross national boundaries”
Tong noted that it is still possible for traders to bypass any restrictions. He said:
“Even if we were to ban them, transactions can still be easily conducted via platforms in overseas markets.”
Tong revealed that the watchdog is looking to introduce a legal framework for cryptocurrency regulations instead, based on the increase in the trade of Bitcoin and other cryptos. The official, however, emphasized that the SFC is going to be careful with their approach as cryptocurrency platforms are “new technology” and may not “qualify as securities” since crypto trading do not fall within the SFC’s current requirements.
“We need to see if and how these platforms can be regulated to a standard that is comparable to that of a licensed trading venue, while at the same time ensuring investors interest are being protected.”
Crypto Exchange Operators Welcome Move
According to the report, Circle and Bitcoin Mercantile Exchange (BitMEX), domestic exchanges operating in Hong Kong, sees the news as a welcome development. In a telephone interview with the chief operating officer of BitMEX, Angelina Kwan said she would cooperate with the SFC on the proposed regulations. She added:
“We hope the guidelines or regulations being considered will keep pace with market developments.”
Additionally, founder and CEO of Circle, Jeremy Allaire said his Hong Kong based company will proactively work with the SFC on those frameworks as is it well aware that it operates in a non-regulated space. Allaire further added:
“We’ll pay very close attention when new licensing or regulatory frameworks emerge, and will proactively work with the government on those frameworks.”
Earlier, AtoZMarkets reported that the financial regulator of Hong Kong markets and the central bank of the country, the Hong Kong Monetary Authority (HKMA) announced that it has no plans to issue a central bank digital currency (CBDC).
The Acting Secretary for Financial Services and the Treasury, Joseph Chan, has who attended a council meeting with legislators in Hong Kong stated that HKMA’s research on the topic has brought a belief that CBDC would not be as useful in Hong Kong as it is in other jurisdictions.
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