When it comes to monitoring the operations of the cryptocurrency business, the authorities in charge of regulation in Hong Kong are ramping up their game.
According to a report that was submitted by the Securities and Futures Commission on February 6th, the organisation has plans to recruit four more staff members in order to “better regulate” the operations of local virtual asset (VA) providers. In addition, the additional monitoring would assist “better analyse the compliance and risk” by enabling retail investors to exchange virtual assets on regulated platforms. This will make it possible for more people to participate in the cryptocurrency market.
The commission said in a written announcement that “this is in response to a rising number of operators that have indicated interest in carrying out VA operations such as trading platforms and the administration of VA funds.”
This comes at the beginning of the implementation of a new licencing framework that will allow for larger retail investment in cryptocurrencies.
According to the regulations in place at the time, trading platforms that had been granted a licence to operate in Hong Kong could previously only service professional investors or clients who had portfolios worth at least $1 million (HK $8 million).
The Anti-Money Laundering and Counter-Terrorist Financing Bill was amended in December 2022 to include the new licence system, which was then passed by lawmakers. On the other hand, it won’t go into effect until June 2023, so there’s still plenty of time for local companies and government authorities to be ready for a fresh influx of people into the market.
Hong Kong has been making progress toward its goal of becoming a centre for Web3 innovation and modernising its cryptocurrency business. This strategy called for the creation of an investment fund with a total of $500 million so that widespread implementation could be pushed via the local sector.
The Hong Kong Monetary Authority (HKMA) has just lately issued a statement indicating that it would not permit algorithmic stablecoins in its most current rule. The announcement was published online. However, the regulatory body has said that it plans to build a comprehensive regulatory framework for stablecoins, which would be based on the complete backing of assets of this kind.