Chan Ho-Lin, Deputy Secretary for Financial Services and the Treasury, announced plans to extend the regulatory reach over virtual asset transactions during a recent address at Fintech Week. Hong Kong is known for being ahead in licensing digital banks, insurance, and trading platforms. They’re determined to improve the rules while supporting innovation in the digital asset world.
Plans to expand supervision of virtual asset transactions
According to the local media report, Ho-Lin disclosed that the Hong Kong Monetary Authority (HKMA) would soon consult the banking industry on guidelines for offering virtual asset custody services to ensure the safety and protection of customer assets. This effort by the authority reflects the region’s dedication to maintaining a secure environment for the growing virtual asset industry.
Increasing supervision of OTC transactions and stablecoins
Furthermore, Hong Kong’s government has set its sights on broadening the scope of its supervision of virtual asset transactions to encompass activities beyond virtual asset trading platforms. The Treasury Bureau and HKMA will jointly release a consultation document, inviting industry stakeholders and the public to contribute their perspectives on the regulatory system for stablecoin issuers.
Ho-Lin also highlighted and shared insights from his recent visit to Europe, where he observed a strong interest among local companies in Hong Kong’s potential as a hub for Web 3 development.
Making policy clear, stable, and predictable
Many companies expressed intentions to explore opportunities in Hong Kong and leverage its strategic position for entering the mainland market. Hong Kong’s regulatory landscape was lauded for its clarity, stability, and predictability, attributes that are instrumental in fostering a conducive business environment.
Ho-Lin emphasized the transformative potential of Web 3 technology, which can address various challenges across finance, education, business operations, and daily life.
Hong Kong has integrated blockchain technology into various sectors, such as government-backed auto insurance certification (MIDAS) and trade financing. The Hong Kong Stock Exchange now trades virtual asset futures ETFs and tokenized green bonds were issued, showing a strong commitment to the financial sector’s evolution.
The collaboration between the Hong Kong Monetary Authority and the People’s Bank of China on digital renminbi cross-border payments has entered its second phase of testing.
The objective is to facilitate the practical application of blockchain and Web 3 technology across multiple levels. As Hong Kong takes bold steps to expand its regulatory framework and embrace the potential of Web 3 technology, the region is positioning itself as a global fintech and virtual asset leader, offering a clear and stable regulatory environment for businesses and investors alike.