According to the new CEO of the Hong Kong Securities and Futures Commission (SFC), Julia Leung Fung-yee, The new licensing program, which is scheduled to go live in June, will restrict Hong Kong’s retail trader activity to “highly liquid” digital assets.
At the recent Asia Financial Forum, Leung noted that many digital asset platforms have thousands of products. Nevertheless, The SFC executive stressed that they do not plan to “allow retail investors to negotiate with all of them”. Instead, the SFC will establish criteria that allow retail traders to trade only major virtual assets.
Although the SFC executive did not give more details about which assets can be traded, Leung mentioned that they will be “highly liquid” assets. When asked about Bitcoin (BTC) or Ether (ETH), the SFC executive did not respond, but reiterated that “highly liquid” assets will be allowed.
Despite the limitations that will be placed on retail investors, Leung highlighted that they are moving to position Hong Kong as a hub for virtual assets. “Our goal is to have a proper regulatory framework to safeguard the interests of all investors and enhance Hong Kong as a hub for virtual assets,” she said.
The CEO also noted that proper regulation could prevent problems like the collapse of the FTX exchange in Hong Kong.
At a recent event, Hong Kong Financial Secretary Paul Chan stated that many cryptocurrency companies are applying to establish themselves in Hong Kong. The official highlighted that the government is doing its best to provide proper oversight to the crypto space and harness the potential of Web3 technology.
Digital assets have recently been a hot topic in the special administrative region. On January 5, a Hong Kong official proposed the idea of converting the digital Hong Kong dollar into a stablecoin. Wu Jiezhuang, a member of the legislative council, believes this could address the risks related to digital assets on Web3.
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