Hong Kong will soon allow retail investors to trade crypto

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Hong Kong will pass a new law allowing retail investors to invest only in “highly liquid” crypto assets. The new law will come into force in June.

Hong Kong is bringing a big change to crypto regulations in the region, allowing retail investors to trade only highly liquid assets. Securities and Futures Commission CEO Julia Leung Fung-yee said retail investors would be allowed to trade these particular crypto assets with a licensing law. This change will come into effect in June.

Fung-yee revealed the change during the Asian Financial Forum on January 11. In addition, the SFC will also release a consultation paper during this quarter that will offer more details on these highly liquid assets. The SFC will issue guidelines for licensing exchanges alongside this consultation paper.

Fung-yee was unequivocal in his remarks about only allowing trading in specific assets. She says,

Some virtual asset platforms offer over 2,000 products, but we do not plan to allow retail investors to trade them all. We will set the criteria that will allow retail investors to [only] trade in major virtual assets.

She offered no opinion on which assets would be permitted. However, the CEO said the priority was to have a regulatory framework to prevent incidents like FTX from happening again.

Other countries have also debated allowing trading of only certain assets. Australia has considered a symbolic mapping effort, which could pave the way for laws similar to those Hong Kong is establishing.

Laser Focused on Crypto Regulation

Hong Kong has a strong focus on crypto regulation. Fung-yee took over as CEO on January 1, and she made her intentions known.

The region aims to revitalize its status as a financial center by regulating crypto and attracting businesses. Web3, in particular, appears to be a priority, with a Hong Kong-based accelerator offering support to 1,000 Web3 startups.

Hong Kong is working on several crypto pilot projects

Hong Kong has also made progress on institutional investment laws. It recently allowed institutional investors to subscribe to tokenized green bonds. Hong Kong Financial Secretary Chen Maobo also confirmed that he is working on several pilot projects related to cryptocurrencies.

Regulation seems to be the top priority, however, and the crypto market in the region should expect significant changes in the coming months. Still, it’s a positive change for the market, which can benefit from a financial center with a lot of clout.

Disclaimer

BeInCrypto has reached out to a company or individual involved in the story for an official statement on recent developments, but has yet to receive a response.

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