Regulators in Hong Kong will soon decide which crypto tokens its citizens can invest in amid a raft of new digital asset policies coming this year.
The move is the latest crypto regulatory step taken by Hong Kong in a market that has a long association with significant digital asset trading volume.
Hong Kong to Issue Consultation Paper
Hong Kong’s Securities and Futures Commission (SFC) is preparing a list of crypto assets open to retail traders, Reuters reported on Wednesday. The SFC’s new CEO, Julia Leung Fung-yee, said these whitelisted crypto tokens will be highly liquid ones considered safe enough for non-professional investors. Leung made these comments during a panel session at the Asian Financial Forum held in Hong Kong on Jan. eleven.
“Some virtual assets platforms have over 2,000 products, but we do not plan to allow retail investors to trade in all of them,” Leung statedadding, “We will set the criteria that would allow retail investors to [only] trade in major virtual assets.”
Apart from the list of approved tokens, Leung added that the SFC will liaise with the public on regulations for retail crypto trading. The approved list is part of a broader crypto regulatory push that will include the publishing of a consultation paper before the end of Q1 2023. This regulatory push will also contain new licensing protocols for crypto exchanges and other virtual asset service providers.
For Leung, the goal is investor protection. The regulatory chief noted the massive price decline occasioned by the current bear winter. CryptoPotato previously reported that investors in Hong Kong lost $50 million to crypto scams as of August 2022.
Asia Could Reignite Crypto Bull Run
The planned regulations for retail participants are the latest positive crypto development to come out of Hong Kong. Stakeholders in the city-state have long since stated the goal of making it to be a crypto hub in the next bull run.
BitMEX Co-founder Arthur Hayes noted in October 2022 that the bull market will return when China and Hong Kong “love crypto.” At the time, Hong Kong finance officials were posturing to reclaim the city’s previous crypto-friendly stance.
A series of stringent crypto measures over the past two years did dampen enthusiasm for the asset class in Hong Kong. This led to the likes of Thailand and Singapore becoming home to several crypto projects and leading the charge for adoption in Asia.