After Hong Kong, This Country Could Also Give the Green Light to Cryptocurrencies!

finance company Bernstein One cryptocurrency published the report. The report states that the Hong Kong Securities and Futures Commission has adopted an “edit to protect” approach to digital assets.

Hong Kong’s Approach to Cryptocurrency Regulation Could Attract Capital and Talent to Asia

In a research report published Monday, Bernstein said that the Hong Kong Securities and Futures Commission (SFC) has taken the “regulate to protect” approach to cryptocurrencies, which contrasts with the recently implemented regulation in the US.

Bernstein analysts say this could be a “critical fork in the road” for the cryptocurrency industry, leading to a relocation of capital and talent to Asia as a crypto hub.

The SFC on Monday published its proposed rules for virtual asset trading platforms and is awaiting public comment.

The report said it plans to allow individual investors access to licensed exchanges subject to restrictions, suggesting that investors would be better off trading with licensed venues rather than offshore and unregulated players.

Trading crypto derivatives is off the table for now, as the SFC has postponed its decision to allow such instruments to a later time.

The new licensing regime is expected to go live on June 1, with a 12-month transition period for existing crypto exchanges. Exchanges that do not currently operate in Hong Kong will need to be fully compliant before they can start trading.

In October, Hong Kong opened its doors to crypto businesses to help revitalize its struggling financial centre.

Now signs are emerging that this move is receiving covert support from Beijing, providing momentum for Chinese firms to return.

Local crypto companies say their holdings have cleared doubts about Beijing’s stance on Hong Kong’s efforts to become a crypto hub.

*Not investment advice.