According to local media reports, a Chinese state-owned agency is looking up to Hong Kong as the region is ramping up crypto regulations. Reportedly, Greenland, a Chinese state-owned real estate developer, is planning to apply for a virtual assets trading license in Hong Kong.
Sources reveal that the fintech unit of Greenland will apply for the license. The Chinese government in particular, the Shanghai municipal government owns 46.4% of the company.
With this step, it marks the first state-owned Chinese entity to apply for a digital assets license in Hong Kong. While the government has been stricter, Chinese banks have already warmed up to offering services to crypto companies in the region.
Speaking about the development, Greenland Financial Technology Group CEO James Geng Jing said that the firm is enthusiastic about expanding its “digital financial business in Hong Kong as the gateway to the world.”
Furthermore, he counted on the upcoming crypto regulation to be beneficial and that it makes Hong Kong even more attractive. James said with Hong Kong launching a new regulatory regime for virtual asset trading platforms, it is the perfect timing for Greenland to enter into this business in Hong Kong. He added:
Hong Kong has been ramping up its activity, both in terms of actual offerings and regulation, in the crypto space in recent months. New rules have been implemented, and more will likely arrive soon.
While Hong Kong is progressing with its crypto regulation alongside welcoming crypto entities, mainland China has been continuing its crackdown on the crypto market. Most recently, prosecutors are bearing down on “pseudo-innovation” in the NFT market.
Reportedly, the Chinese prosecutors are targeting mechanics such as airdrops, rewards, blind boxes, and limited sales which they believe can lead to pyramid schemes that inflate the prices of NFTs. It is yet another action taken by Chinese authorities, who are not keen on letting the crypto market flourish as is.
On the other hand, Hong Kong has been softer towards cryptocurrencies while prioritizing investors’ safety. Hong Kong’s new licensing regime will take effect from June 2023 and proposes that all centralized cryptocurrency trading platforms operating in Hong Kong must be licensed with the regulatory body.
Reportedly, among the many items on the agenda are stablecoins, which is a pain point for many regulators. The guidelines also include conditions like the safe custody of assets, Know Your Customer (KYC), conflicts of interest, cybersecurity, accounting and auditing, risk management, Anti-Money Laundering/counter-financing of terrorism (AML/CFT), and prevention of market misconduct.
Authorities in the region have also gone to the extent of stressing to banks that there is no ban on serving crypto firms. Hong Kong aims to revitalize its financial hub status with crypto and particularly emphasizes Web3. The finance chief has even said that now is the best time to invest in web3.
However, even while being supportive of cryptocurrencies, the region has highlighted the need for efficient and stringent regulation. Recently, Hong Kong Monetary Authority Chief Executive Eddie Yue said that while crypto companies are welcome, they should not expect things to be easy.