Hong Kong’s recent pivot to becoming a crypto hub is reportedly being made with Beijing’s subtle blessing.
Key Takeaways
- Hong Kong is gearing up to become a crypto hub.
- The Chinese government is giving subtle hints of approval towards the plan.
- Yesterday a Hong Kong regulatory body outlined conditions under which retail investors would be allowed to purchase cryptocurrencies.
China is dipping its toes back into the crypto world by allowing Hong Kong to open up to the market.
One Country, Two Systems
The Chinese government seems keen to relax its draconian anti-crypto stance—at least in Hong Kong.
According to 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, although Beijing isn’t anywhere close to making crypto legal on the Chinese mainland again, it seems willing to let the city develop its crypto industry.
The involvement of China’s Liaison Office in Hong Kong’s recent crypto gatherings has been one of many good signs. Officials have reportedly been swapping business cards and contact details with crypto industry leaders in a friendly manner, even going so far as to making follow-up calls on projects.
Another way the Chinese government has shown its approval is through explicit endorsements of the city. 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 doesn’t violate the bottom-line, to not threaten financial stability in China, Hong Kong is free to explore its own pursuit under ‘One Country, Two Systems,’” National People’s Congress member Nick Chan told Bloomberg.
Hong Kong’s 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 several requirements. The implementation of knowledge tests, risk profiles, and reasonable limits on allowable exposure would be necessary for exchanges to gain such licenses.
Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other crypto assets.
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