The Chinese government is supporting Hong Kong’s goal of becoming a hub for cryptocurrencies. According to reports, Beijing’s mainland government may be tacitly accepting the initiative.
Contrary to China’s extensive cryptocurrency ban, Hong Kong’s government raised the notion of presenting a bill to regulate cryptocurrencies and allow retail investors make direct investments in virtual assets in October last year.
Chinese officials have not openly criticized the plan, and interactions with Beijing officials about the issue have so far been cordial. Local crypto business operators believe that Beijing may be open to utilizing Hong Kong as a testbed for cryptocurrencies.
According to the report, officials from the China Liaison Office have been attending crypto events in Hong Kong to better understand the trend of events.
Mr. Nick Chan, a National People’s Congress member, stated:
“As long as one does not violate the bottom line… not threaten financial stability in China, Hong Kong is free to explore its own pursuit under ‘one country, two systems.”
Following the hint, Mainland Chinese and foreign enterprises are reportedly rushing to register their companies and preparing to relocate back to Chinese territory 15 months after Beijing outlawed the sector, forcing many to move their operations elsewhere.
The requirements for operators of virtual assets, such as cryptocurrencies, were the subject of a public consultation released on Monday, February 21, by the Hong Kong Security and Futures Commission (SFC). This comes after the SFC established a license requirement for all of virtual asset services providers (VASPs) in Hong Kong.
Several cryptocurrency businesses are looking to expand into the city as a result of the current regulatory push. Most recently, Huobi Global announced that it would apply for a local license and intends to launch a new exchange in Hong Kong that will cater to institutions and high-net-worth individuals.
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