The Hong Kong government has introduced a bill to allow retail investors to directly invest in digital assets, marking a stark departure from mainland China’s blanket ban on crypto.
The move was confirmed in a speech by Hong Kong’s Secretary for Financial Services and the Treasury (SFST), Christopher Hui, at the SFST’s Executive Roundtable on October 21.
Hong Kong Looks to Embrace Web3
Hui’s confirmation follows comments reported earlier in the week from the head of Hong Kong’s Securities and Futures Commission (SFC), Elizabeth Wong, who said the Special Administrative Region was looking to introduce a bill which would allow retail investors to “directly invest into virtual assets.”
Wong’s comments came during a panel discussion held by InvestHK on October 17, during which she highlighted how important the ‘one country, two systems’ approach to the regulation of Hong Kong’s financial sector had been in the past, saying it “forms the basic foundation to Hong Kong financial markets.”
Wong added that the SFC was also actively considering tabling a bill allowing retail investors to invest directly into digital assets.
Hui’s speech has since confirmed the introduction of this bill, with the Secretary stating:
“On virtual assets, we have introduced a bill to propose establishing a regulatory regime for virtual asset service providers.”
Secretary for Financial Services and the Treasury (SFST), Christopher Hui
Hui spoke more broadly about fintech, revealing that the theme of this year’s Hong Kong Fintech Week, which runs from October 21 to November 4, will be “Pushing Boundaries, Reaping Benefits”, and will focus on emerging Web3 technologies such as metaverse. For the first time, the event will also issue NFTs, in what Hui describes as an effort to “test their ability to engage participants.”
In a further sign of Hong Kong’s enthusiasm for crypto, Hui said that during Hong Kong Fintech Week the government plans to issue a policy statement outlining their plans for the development of virtual assets which he says is intended to demonstrate to the global virtual assets community the government’s “…vision of developing Hong Kong into an international virtual assets centre.”
Significant Change From Past Stance
This new proposed framework in Hong Kong differs considerably from the government’s previous approach to crypto. For the past four years the SFC has restricted crypto trading using centralised exchanges to professional investors, which means only individuals with portfolio’s valued at over US$1 million could invest in crypto using centralised exchanges.
According to Wong, over the past few years crypto markets have become more compliant and generally safer for average investors to participate in and should therefore be made accessible to all retail investors, explaining:
“We think that this may be actually a good time to really think carefully about whether we will continue with this professional investor-only requirement.”
Head of Hong Kong’s Securities and Futures Commission (SFC), Elizabeth Wong
Hong Kong’s new approach follows the launch of a US$3.8 billion fund designed to attract business and investment back to the Special Administrative Region after something of an exodus following several years of political turbulence and strict COVID-19 lockdowns.