The Hong Kong Government issued, on October 31st, a statement entitled “Policy Statement on Development of Virtual Assets in Hong Kong” that sets out its stance and approach to developing a “vibrant sector and ecosystem for Virtual Assets (“VA”) in Hong Kong”.
The statement relates that the Hong Kong Government and financial regulators are working towards providing a facilitating environment for sustainable and responsible development of the Hong Kong VA sector. It also reports that the Government is stepping up its preparatory work for a new licensing regime and preparing to allow retail investment in Virtual Assets under certain conditions. It outlines that the Government is exploring a number of pilot projects to test the technological benefits brought by the Virtual Assets sector.
Following the announcement, OKX Director of Financial Markets Lennix Lai has offered the following insights into what the changes are likely to mean for Hong Kong, the sector, and the world’s second largest crypto exchange by trading volume:
On the promise offered by Hong Kong as a Virtual Assets hub, Lai said:
“The factors that determine which markets will become the crypto hubs of the future include the jurisdiction’s rule of law, financial market infrastructure, capital availability, and talent pool. Hong Kong offers near unmatched potential in a lot of these areas, and has always maintained a keen focus on investor protection, which is of utmost importance.”
“The approaches taken in regions like the UAE and Singapore have shown that it is possible to balance investor protection and the business needs and practical realities of the crypto market.”
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On what the statement means for OKX and the sector, Lai stated:
“It is expected that many crypto industry players—ourselves included—will be looking to re-focus their efforts on the Hong Kong market and grow their presence to the level of a regional or even the global hub.”
“This signal from the Hong Kong Government is very important and gives us a better sense of the regulatory direction that it has in mind for the industry. With the Government reconsidering its stance and potentially opening up the market for some retail participation, this increasingly open attitude has given us enough confidence to make the Hong Kong market a priority. For the crypto ecosystem there to flourish, those players with Asia-Pacific headquarters in Hong Kong will need to attract a lot of talent. This will require both the presence of crypto-minded professionals and net migration into Hong Kong.”
Lai also commented that OKX would closely monitor upcoming regulatory developments and dedicate resources to ensuring compliance.
In closing, Lai remarked that:
“Hong Kong has been waiting for this industry-friendly regulatory clarity for years. The Government of Hong Kong has sent a strong signal that it wants to support the development of Virtual Assets and this offers the foundational basis that the industry needs to invest and develop business presences in Hong Kong.”
“The crypto industry is still young, and it needs accommodating yet attentive environments in which to grow. OKX is very excited to see that Hong Kong has signaled its willingness to be just such an environment as it continues its track record of leading as a global innovation hub.”