Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue Wai-man said its crypto regulations in Hong Kong will be tight and shun any ‘Light Touch’ approach. He also mentioned “those who do not like it are welcome to go elsewhere.”
The licensing regime for cryptocurrency exchanges with new rules is due to start from 1st June 2023.
The comments come weeks ahead of a new licensing regime for crypto exchanges as the city seeks to become a virtual asset hub.
Bloomberg Wealth Asia Summit on Tuesday.
Mr. Eddie Yue emphasized that there are no intentions to relax crypto regulations in Hong Kong as the city strives to position itself as a global industry hub. These statements were made just prior to the upcoming enforcement of new licensing regulations for cryptocurrency exchanges.
“Our regulations will be tight,” Eddie Yue Wai-man, Chief Executive of the Hong Kong Monetary Authority (HKMA), said at the Bloomberg Wealth Asia Summit on Tuesday.
“We will let the industry develop and innovate. We will let them create the ecosystem here, and that actually brings a lot of excitement,” Yue added. “But that doesn’t mean light-touch regulation.”
Following a series of industry setbacks in the past year, governments worldwide are taking steps to regulate the cryptocurrency industry. In this context, Hong Kong has once again become an attractive choice for certain companies. Last October, the city declared its ambition to become a global hub for virtual assets, further solidifying its appeal.
In February, the Securities and Futures Commission (SFC), the securities regulatory body in Hong Kong, introduced new regulations concerning retail participation in crypto trading. According to these rules, retail investors will be permitted to purchase tokens such as bitcoin and ether, which have significant market capitalizations, through licensed virtual asset platforms.
Starting next month, all centralized virtual asset trading platforms operating in Hong Kong or targeting Hong Kong investors will be required to obtain a license from the regulator.
The Hong Kong Monetary Authority (HKMA), the city’s de facto central bank, also announced in February that it is developing a mandatory licensing framework for activities related to stablecoins. This decision came after a consultation process initiated the previous year. As currently outlined, the rules for stablecoins would necessitate the reserve assets backing the stablecoin to always be equal in value to the outstanding tokens. Stablecoins are typically linked to a fiat currency or a basket of currencies. The HKMA aims to implement this licensing regime by 2024.