Hong Kong advances its plan to become a crypto hub and will launch token green bonds

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(Kitco News) – Hong Kong Financial Secretary Paul Chan reported that the government of the People’s Republic of China Special Administrative Region remains committed to developing its cryptocurrency infrastructure and recently completed the necessary legislative work to put put in place a licensing system for Virtual Asset Service Providers (VASPs).

According to a report by Radio Television Hong Kong (RTHK), Chan made the comments during a speech at an event organized by public incubator Cyberport, saying that Hong Kong has now become a hub for connecting business high quality virtual assets.

Chan highlighted the fact that the local government and regulators are open to collaborating with crypto and fintech startups in 2023, revealing that many top tech startups have already approached the government to explore the possibility of establish their international headquarters in Hong Kong.

Under the new licensing system for VASPs, anti-money laundering, anti-terrorist financing and investor security requirements have been aligned with requirements imposed on traditional financial institutions, according to Mr Chan. “I think they can provide some degree of market recognition to virtual asset exchanges,” he said.

“The government plans to provide the market with an appropriate proportion of oversight to unlock Web 3.0 and the potential of other technologies,” he said, adding that this would help address risks associated with financial stability, investor protection and inappropriate capital activities.

Government and regulatory agencies in the region are also conducting several pilot projects designed to test the technical advantages of virtual assets and explore related applications. This includes a token green bond issuance pilot program for institutional investors and a review of cross-border use of e-HKD, the Hong Kong Central Bank’s (CBDC) digital currency.

According to Chen Haozhi, deputy director of the Office of Financial Affairs and Treasury Affairs, the Securities and Futures Commission (SFC) will also establish regulatory rules for virtual asset exchanges with the aim of launching public consultation in early 2023.

Hong Kong has stepped up its efforts to firmly establish itself as a global cryptocurrency hub in recent months. In October, his government announced that it was considering a possible lifting of the ban on crypto retail trading in the region as part of a plan to boost economic growth by harnessing interest in the asset sector. digital.

And in mid-December, the Hong Kong stock exchange launched the region’s first two exchange-traded funds (ETFs) for cryptocurrency futures, which raised $73.6 million ahead of their debut.

According to a report by Forex Suggests, Hong Kong has been ranked as the most crypto-ready region in 2022 after ranking in the top three in several survey categories, including the number of blockchain startups per 100,000. people and the number of crypto ATMs proportional to the population. A significant part of the appeal of the special administrative region is that it does not apply capital gains taxes on cryptocurrencies.

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