The People’s Bank of China highlights Hong Kong’s active crypto licensing, as well as the prominence of cryptocurrency as an emerging trend in several countries in its recent Financial Stability report.
In an excerpt from the Financial Stability Report 2024, China’s central bank the progress of cryptocurrency compliance in Hong Kong. The report acknowledged how crypto has become a global trend that major countries are quick to accommodate via licensing and regulations.
“At present, 51 countries and regions in the world have issued prohibitions on crypto assets, and some economies have adjusted their original laws or re-legislated regulations,” wrote the central bank in a translated report.
The Financial Stability Report mentioned several major steps made by the U.S., Japan, Singapore, the U.K., and the European Union in making sure the crypto industry has clear set guidelines and the rights of crypto traders are protected well within the national laws.
Hong Kong implements a “dual license” system for virtual asset trading platforms and operators, dividing cryptocurrency into two categories: security tokens and non-security tokens. Security tokens have to adhere to licensing standards listed in the Securities and Futures Commission regulatory framework, while non-security tokens have to follow the Anti-Money Laundering bill.
Meanwhile, financial institutions based in Hong Kong that wish to provide services related to crypto must apply for registration licenses from financial regulators. According to the report, major financial institutions such as the Hongkong and Shanghai Banking Corporation and Standard Chartered Bank are required to include crypto asset exchanges in their daily scope of operations.
Despite these initiatives, Hong Kong has failed to catchup to Singapore in terms of crypto licensing. Singapore has been praised for accelerating its crypto licensing process, granting licenses to 13 crypto firms in 2024 alone.
Meanwhile, regulatory hurdles continue to stall Hong Kong regulators, effectively slowing down the license issuing for crypto firms in the region. In fact, major exchanges like OKX and Bybit have cancelled their Hong Kong license applications without explaining why.
As previously reported by crypto.news on Dec. 24, Hong Kong has distributed licenses to seven platforms, four of which have just been approved this month. It is speculated that Hong Kong’s slow licensing process is hindered by China’s influence. Unlike Hong Kong, crypto trading activities are banned in mainland China. To bypass the ban, traders based in China use VPN to access exchanges like Bybit from a server abroad.
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