While some jurisdictions (cough: America) have adopted a regulation-by-enforcement approach toward crypto, others are doing the opposite. According to a June 15 report from The Financial Times, the Hong Kong Monetary Authority is pressuring major financial institutions to accept crypto clients. But it’s not just regulators laying down a red carpet to boost the special administrative region’s (SAR’s) Web3 industry. In one instance, Johnny Ng Kit-Chong, Member of the Legislative Council of Hong Kong, wrote on June 10:
“There have been a lot of news about international virtual asset exchanges in the past two days. I send forth an invitation to welcome global virtual asset exchanges, including @coinbase, to come to Hong Kong, apply for a compliant exchange, and negotiate a listing plan. I am willing to provide assistance!”
Similarly, Joseph Chan Ho Lim, Hong Kong’s Under Secretary for Financial Services and the Treasury, revealed in an interview that The Hong Kong Monetary Authority has conducted public consultations on the launch of stablecoins and is in the process of establishing a regulatory framework by the end of the year. “Hong Kong will continue to support the development of the industry in the future and welcomes the industry and talents to come to the SAR,” the politician said.
The Hong Kong Web 3.0 Festival gallery hall (Twitter)
On Jun. 1, Hong Kong Securities Regulatory Commission issued regulations stipulating the requirements for cryptocurrency exchanges to apply for a license to operate in Hong Kong. For regulated trading platforms, a license application must be submitted to the Securities Regulatory Commission within nine months, or before Feb. 29, 2024. If not, their business in Hong Kong must be terminated before May 31, 2024.
Bank of China mints debt notes on Ethereum
On Jun. 12, BOCI, the investment banking subsidiary of Bank of China, revealed the tokenization of 200 million Chinese Yuan ($28 million) in digitally structured notes on the Ethereum blockchain. The move is reportedly the first act of a Chinese financial institution tokenizing a security in Hong Kong. The notes are governed by both Hong Kong and Swiss law as per their origination by the Swiss investment bank UBS. Ying Wang, deputy CEO at BOCI, commented: