Since June 2021, China has banned all crypto trading and mining activities in the country, leading to an exodus of investors and miners. However, Hong Kong has only restricted crypto trading to professional investors for the past four years, but it is changing that stance.
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If the bill passes, retail investors in China will be able to trade crypto under the regulation of the Securities and Futures Commission (SFC). According to the head of the SFC’s fintech unit, Elizabeth Wong, during a panel organized by InvestHK, the proposal would allow retail investors to invest directly in virtual assets.
Back with a bang! Hong Kong is taking action to regain its status as a global cryptocurrency hub by launching several legal initiatives related to the crypto industry.
(Reporting via @coindanslecoin) https://t.co/iv4XgMDTFS
— Cointelegraph (@Cointelegraph) October 21, 2022
That said, only people with a wallet worth at least $1 million will be able to trade cryptos, which is about 7% of the city’s population according to September 2021 data. Additionally, the SFC will allow the development of NFTs and the metaverse in Hong Kong in order to make the city an “international hub of virtual assets.” And to consider allowing cryptocurrency-related ETFs for retail investors.
Why is Hong Kong relaxing cryptocurrency regulations?
Hong Kong has long been a leader in cryptocurrency development and was named the country best prepared for widespread crypto adoption by a July 2022 study by Forex Suggest.
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Some of the factors noted include cryptocurrency ATM installations, a startup culture, and positive cryptocurrency regulation.
1/ Hong Kong investors will be able to invest directly in crypto assets!
Elizabeth Wong, head of the fintech division, confirmed that regulators are considering allowing exchanges and other intermediaries to sell cryptocurrencies directly to retail investors. pic.twitter.com/HquF1dE1yh
— CORE Web3.1 (@qinxiancong) October 21, 2022
Wong also noted that cryptocurrencies have become more legal in recent years, which is why the city is changing its attitude towards the sector. There is also hope to attract foreign investment to the city after a talent drain due to strict lockdowns and an uncertain political climate.
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