The chair of the FinTech Association of Hong Kong (FTAHK) has suggested that Hong Kong is still a crypto-friendly territory, claiming that as other jurisdictions like the United States and Singapore step back from permitting crypto retail trading, Hong Kong will step forward. FTAHK chair Neil Tan has offered assurances that from June 1, 2022, a licensing regime for crypto exchanges that includes retail will come into effect, and he has said that the licensing guidelines are scheduled to be released in May.
According to Tan, people will participate in crypto trading if they have access to it in a legal and regulated way, so Hong Kong’s decision to license crypto trading will likely attract interest. Given that other options worldwide are dwindling, he thinks participants will flock to Hong Kong if they build more extensive facilities for crypto trading.
In response to a proposal from Virtual Asset Service Providers (VASPs) that retail traders should be granted access to licensed crypto platforms within their licensing regime, in February the region’s securities regulator made moves to allow that access. It has been noted that refusing access to these platforms could push such traders toward unregulated overseas alternatives. At present, these platforms can only provide accredited professional investors with service.
Hong Kong has recently implemented what is considered to be an appealing legal framework for cryptocurrencies. In addition to this, it has focused efforts on drawing talent and offering infrastructure providers—what Tan described as “the back end.” The governments of both China and Hong Kong seem to appreciate the opportunities this offers and are taking action to encourage inbound talent.
There is a large amount of talent across the border in China. With the nation currently gripped by unemployment, Tan argued that more and more talented professionals are coming over the border from Big Tech and finding work in Hong Kong.
Increasingly, people are adopting crypto trading as part of their portfolios, whether they are retail investors, high net worth individuals, or institutional investors. With so many people looking for balances in their portfolios and aiming to gain a specific type of exposure, the simultaneous broadening of the financial industry to digital assets is a natural progression. This is especially true as cryptocurrencies continue to gain more prominence.
It seems that Hong Kong has already welcomed the arrival of people with the talent and infrastructure in place to support it, making the territory well-poised to become a central hub for virtual asset activity.
