• China is reportedly supportive of Hong Kong’s move to attract crypto investors and establish itself as a crypto hub.
• Representatives from mainland China are monitoring the developments in Hong Kong through meetings and follow-up calls.
• The Securities and Futures Commission (SFC) has begun a consultation process to allow Virtual Asset Service Providers to apply for licenses to offer trading services for retail investors.
China’s Supportive Stance towards Hong Kong’s Crypto Move
Reports suggest that Beijing is onboard with Hong Kong’s recent move to embrace cryptocurrency, encouraging mainland Chinese firms to return to the city. Representatives from China’s Liaison Office, along with other officials, have attended meetings and made follow-up calls to check on the progress of developments in the island city.
SFC Consultation Process for Retail Investors
The Securities and Futures Commission (SFC) has initiated a consultation process which will allow Virtual Asset Service Providers (VASPs) to apply for licenses so they can offer trading services for retail investors. This will include due diligence process on tokens prior to listing, risk profiles for clients, and limits on allowable exposure. It is yet unclear when this process will be concluded.
Chinese Officials Interested in Using City as Testing Ground
Local crypto operators have mentioned that Chinese officials’ presence at these events has cleared up doubts about Beijing’s attitude towards Hong Kong’s efforts of becoming a crypto hub. It appears that these representatives are interested in using the city as a testing ground for digital assets while keeping strict control over such activity within mainland China itself by reporting their findings back home.
Nick Chan’s Opinion
National People’s Congress member and crypto lawyer Nick Chan believes „as long as one doesn’t violate the bottom-line, or not threaten financial stability in China, Hong Kong is free to explore its own pursuit under ‚One Country, Two Systems‘.“
It seems like there’s subtle support from mainland China regarding Hong Kong’s efforts towards establishing itself as a major player in the world of cryptocurrency investments. The decision of whether or not VASPs can provide trading services for retail investors lies with SFC but it looks like Chinese representatives are closely following developments in this regard at least until now.