Hong Kong is making moves to expand its crypto licensing by the end of the year, as part of its goal to establish itself as a digital asset hub. The Hong Kong Securities and Futures Commission (SFC) is planning to issue more licenses to crypto businesses, following the recent approval of HKVAX as the third licensed crypto exchange in the city.
SFC CEO Julia Leung revealed that the agency will be granting licenses in batches, allowing more crypto firms to enter the market gradually. Currently, there are 11 Virtual Asset Trading Platforms (VATPs) on the regulator’s list of potential licensees. The SFC has completed initial inspections and is working with these firms to ensure they meet required standards.
Leung emphasized the importance of strengthening the regulatory framework for virtual assets and warned that companies failing to meet the standards will be disqualified from the licensing process. She also outlined the SFC’s long-term plans for 2024-2026, which include advancing regulations for virtual asset platforms, promoting tokenization of traditional assets, and exploring regional blockchains and Web3 technologies.
In addition to licensing for virtual asset platforms, a new licensing system has been introduced for over-the-counter (OTC) crypto services in Hong Kong. Industry feedback is being sought to refine this approach and ensure compliance with regulations.
These efforts reflect Hong Kong’s broader strategy to position itself as a digital asset hub. While the region’s clear regulations aim to attract businesses, they also present challenges for some global platforms like Binance, due to strict rules focused on investor protection and anti-money laundering measures.
Overall, Hong Kong’s expansion of crypto licensing and regulatory efforts signal its commitment to embracing digital assets and emerging technologies in the financial sector. By creating a conducive regulatory environment, the city aims to attract more crypto businesses and solidify its position as a leading digital asset hub in the region.