Key points to remember
- Hong Kong is gearing up to become a crypto hub.
- The Chinese government gives subtle hints of approval for the plan.
- Yesterday, a Hong Kong regulator set out the conditions under which retail investors would be allowed to buy cryptocurrencies.
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China is dipping its toes back into the crypto world by allowing Hong Kong to open up to the market.
One country, two systems
The Chinese government seems keen to soften its draconian anti-crypto stance, at least in Hong Kong.
According Bloomberg, Chinese officials have given subtle hints of approval of Hong Kong’s recent efforts to re-position itself as a crypto hub. The report says that while Beijing isn’t close to legalizing crypto again on the Chinese mainland, it seems willing to let the city develop its crypto industry.
The involvement of the Chinese Liaison Office in the recent Hong Kong crypto rallies has been one of many good signs. Officials reportedly exchanged business cards and contact information with crypto industry leaders in a friendly manner, even going so far as to make follow-up calls on projects.
Another way the Chinese government has shown its approval is through explicit city endorsements. People’s Bank of China Governor Yi Gang recently delivered speeches on China’s central bank digital currency and the government’s close cooperation with Hong Kong at key events in Hong Kong.
“As long as the bottom line is not violated, so as not to threaten financial stability in China, Hong Kong is free to explore its own pursuit under ‘One country, two systems,'” said Nick Chan, a member of the National People’s Congress, to Bloomberg.
The Hong Kong Securities and Futures Commission proposed in a consultation paper yesterday to allow retail investors to trade large-cap cryptocurrencies on licensed exchanges, provided they meet several conditions. Implementation of knowledge tests, risk profiles and reasonable limits of permitted exposure would be necessary for exchanges to obtain such licenses.
Disclaimer: At the time of writing this article, the author of this article owned BTC, ETH, and several other crypto assets.