Hong Kong Embraces Cryptocurrency, Strengthening Ties

Hong Kong Cryptocurrency

Hong Kong is actively embracing cryptocurrencies by testing a Central Bank Digital Currency (CBDC) and approving retail trading of crypto. The city has been making significant progress towards being more crypto-friendly throughout the busy month of May.

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In a recent blog post, Hong Kong’s financial secretary, Paul Chan Mo-po, expressed the region’s intention to regulate and foster growth. Despite recent fluctuations and closures of virtual asset exchanges, Chan emphasized the importance of advancing Web3 technology and its prospects.

Here are the notable measures Hong Kong has implemented thus far:

Venturing into the Metaverse

Hong Kong’s Cyber Security and Technology Crime Bureau (CSTCB) has introduced the CyberDefender Metaverse, a platform aimed at educating people about Web3 technology and associated risks. The bureau expressed concerns about the decentralized nature of Web3 and how it could attract cyber criminals targeting devices, virtual asset wallets, and smart contracts.

The police highlighted a rise in crime related to such technology, with 663 cases and a loss of $570 million reported in the first quarter of this year. Alongside the platform, Hong Kong also launched the CyberDefender website, which allows users to search for documented instances of fraudulent activities by entering a URL, email, or phone number.

Hong Kong to Remove Ban on Retail Crypto Trading

Hong Kong’s securities regulator, the Securities and Futures Commission (SFC), recently concluded its consultation period, where industry stakeholders were given the opportunity to share feedback on various matters. The SFC received over 150 submissions, with most stakeholders expressing overall support for the proposed requirements.

As a result, licensed virtual asset providers will now be allowed to offer services to retail crypto traders, reversing the restrictions imposed last year. These changes will come into effect on June 1 and include mandatory investor training and awareness of potential risks for smaller investors.

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Hong Kong Becomes Attractive Destination for Crypto Exchanges

Crypto exchanges are capitalizing on Hong Kong’s crypto-friendly atmosphere, with several seeking licenses to operate in the region. Huobi aims to offer a range of crypto trading options, including Bitcoin (BTC) and Ethereum (ETH). Gate Group has launched Gate.

HK, which is now open for registration and trading since May 23. OKX is providing its services to local traders through a dedicated exchange app. Additionally, BitMEX has recently opened its platform to users in Hong Kong.

Hong Kong Explores CBDC with Trial Run

Hong Kong is currently conducting a trial for its central bank digital currency (CBDC), known as the e-HKD or Cyber Hong Kong Dollar. In mid-May, the Hong Kong Monetary Authority (HKMA) announced this trial, aiming to foster collaboration among the government, industry, and academia to ensure research and development keeps up with the evolving landscape.

Sixteen banks and payment companies were selected to participate in the trial, where they will explore six potential use cases. Additionally, Hong Kong’s banking sector collaborated on a paper discussing CBDCs, indicating that some members of the group are nearing a decision on advancing to the next stage of their CBDC initiatives.

Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.

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