Tron’s founder Justin Sun said on Wednesday that Chinese authorities are keeping an eye on Hong Kong’s efforts to establish the city as a leading Asian cryptocurrency hub as a policy test for the mainland.
Hong Kong outlines strategies for crypto adoption
China has maintained its severe crackdown on cryptocurrencies, including banning initial coin offerings (ICOs) and cryptocurrency exchanges. At the same time, Hong Kong has declared its ambition to embrace digital assets by facilitating retail trading and exchange traded funds, with the ultimate goal of further cementing the city’s status as a leading Asian financial center.
While in Singapore for an interview, Sun noted that China is exploring Hong Kong as an experiment site for crypto adoption so that they can observe all the feedback and all the results. He remarked that this is why he is optimistic and can’t wait to see how the new crypto legislation in the country plays out.
Hong Kong appears unfazed by the worldwide industry’s reaction to FTX’s demise and a decline in token values this year. It has underlined that recent crises demonstrate the need for rule books providing guidance on compliance and investor safety.
Sun says that the current climate in the country is crypto-friendly. He sees this as an indication that not only will crypto be more freely available in Hong Kong, but China’s crypto policy as a whole will also be relaxed.
Hong Kong’s crypto policy
After losing business to other financial centers like Singapore and Dubai, Hong Kong seeks to restore its shine and recapture its status as a global crypto hub. The administration rethought its anti-crypto stance and made this adjustment as a result.
Paul Chan, the country’s Financial Secretary, spoke on the necessity of digitizing the city’s financial services in a prerecorded video message shown on the first day of Hong Kong FinTech Week.
Several potential Web3 financial applications, including non-fungible tokens, green bond tokenization, and a retail digital Hong Kong dollar, may be tested in the country, as suggested by Chan.
Moreover, Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue indicated on Monday that the authority is constructing a risk-based, proportionate regulatory system for payment-related stablecoins and has issued guidelines to banks on cryptocurrency and DeFi-related services.
There will soon be regulations in place to keep digital asset exchanges in the country in check, as revealed by the Securities and Futures Commission. The methodology will be guided by the tenets of “same activity, same risk, same regulation,” Yue said.
Hong Kong used to be a hot spot for bitcoin startups, but as China began cracking down on the industry, many fled to more welcoming locales.