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Hong Kong Government Advances Crypto Regulation with Licensing Bills

 |  February 27, 2024

In a move signaling Hong Kong’s determination to tighten regulations around cryptocurrencies, the government has announced its intention to expedite the enactment of licensing bills for stablecoin issuance and over-the-counter (OTC) crypto trading.

Christopher Hui, the Secretary for Financial Services and the Treasury, addressed this pivotal development on February 21 during a written response to inquiries from Carmen Kan, a member of the Legislative Council. Kan sought clarity on the government’s stance regarding the formulation of regulatory frameworks for cryptocurrencies at the policy level.

In his detailed reply, Hui reaffirmed the administration’s commitment to bolstering a robust regulatory infrastructure for virtual assets. He cited two ongoing public consultations aimed at shaping licensing regulations for stablecoin and OTC trading operators as tangible evidence of this dedication.

Last December, the Hong Kong Monetary Authority (HKMA) and the Financial Services and the Treasury Bureau (FSTB) jointly launched a public consultation focused on regulating stablecoin issuers. This consultation, scheduled to conclude on February 29, has garnered significant attention from stakeholders seeking clarity on regulatory standards.

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Simultaneously, the FSTB initiated another public consultation on February 8 to gather feedback on legislative proposals aimed at bringing the licensing of OTC crypto trading services under the jurisdiction of the Commissioner of Customs and Excise (CCE). This consultation is set to conclude on April 12.

Hui underscored the government’s readiness to advance the proposed licensing bills once both consultations reach their conclusion. “Subject to the consultation outcomes and progress of the preparatory work, the Government will submit bills on the above licensing regimes to the Legislative Council as soon as practicable,” Hui stated in his response.

Highlighting the urgency for comprehensive crypto regulation, Hui revealed a concerning trend of virtual asset-related criminal cases. He noted that such cases have nearly tripled in the past three years, signaling the imperative need for robust regulatory measures to safeguard investors and maintain financial stability.

Source: Daily Coin