- Hong Kong is set to implement a new licensing system for virtual asset providers.
- It aims to regulate the virtual asset industry and protect investors comprehensively.
- Hong Kong’s regulation showcases the typical ‘one country, two systems.’
In an executive dinner in Bangkok, Liang Fengyi, CEO of the China Securities Regulatory Commission (CSRC), announced that Hong Kong’s new licensing system for virtual asset service providers will be implemented this month.
The regulatory framework aims to comprehensively cover all aspects of virtual assets, ensuring investor protection while addressing the risks faced by financial institutions.
Collin Wu, a prominent Chinese report, brought the development to the crypto community.
During her speech, Liang Fengyi acknowledged the challenges faced by the crypto market in the past year, including the default and bankruptcy of several virtual asset-related companies, including FTX and Celsius.
Liang stressed the importance of incorporating virtual asset service providers into the regulatory system to rebuild trust and foster innovation. She noted that jurisdictions that previously embraced crypto have begun tightening their supervision through law enforcement and regulatory measures.
In contrast, Hong Kong’s approach to regulating virtual assets has remained transparent, consistent, and predictable.
Highlighting the unique “one country, two systems” framework, Liang underscored that Hong Kong’s new licensing system demonstrates the region’s commitment to its regulatory path. As crypto transactions remain prohibited in mainland China, Hong Kong aims to balance embracing new technologies and ensuring a controlled and secure environment.
Liang clarified that while Hong Kong does not aspire to become a crypto trading center, it recognizes the importance of crypto trading within the broader virtual asset ecosystem.
The new licensing system welcomes the application of related technologies to financial services, such as bond tokenization and investment funds.
Furthermore, Liang acknowledged that Hong Kong is still in the early stages of establishing a virtual asset ecosystem but expressed confidence that the presence of the virtual asset fintech community in Hong Kong will accelerate its development.
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