We’re not building a crypto hub in Hong Kong, regulator says

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Hong Kong’s bid to attract prominent players in the digital asset space has continued to gain momentum in recent months. However, while this comes with its fair share of digital asset trading, the city-state’s securities chief insists that Hong Kong isn’t building a ‘crypto’ hub.

Leung Fung-yee was speaking at an industry event organized by the Hong Kong Economic and Trade Office, where she addressed the state’s ambition to become a global digital asset and blockchain hub. However, the Securities and Futures Commission (SFC) CEO clarified that Hong Kong isn’t seeking to become a mere crypto trading hub.

Leung Fung-yee, chief executive of the Hong Kong Securities Regulatory Commission, said that the goal is not to make Hong Kong a cryptocurrency trading hub, but also recognizes that crypto trading is an important part of the virtual asset ecosystem. https://t.co/3qzPV5wnjF

— Wu Blockchain (@WuBlockchain) June 24, 2023

Hong Kong, a special administrative region of China, has been walking a tightrope with digital assets. Mainland China has cracked down on the sector, including prohibiting ICOs and digital asset speculation. However, Hong Kong is taking a different approach, which Leung says is a great illustration of “one country, two systems.”

Leung stated that the SFC acknowledges that digital asset trading is an important part of the blockchain ecosystem. However, Hong Kong wants to become much more than a center for speculative trading, she added.

The securities chief lauded the state’s approach toward the industry, which she described as “transparent, consistent, and predictable.” This is despite last year’s carnage which saw many regulators crack down on the sector and tighten their regulations.

Hong Kong was among the most affected countries by the FTX collapse, accounting for 2.2% of the exchange’s customers, higher than Canada, Australia, and the United States. The city-state was also home to the exchange before it moved to the Bahamas in 2021.

“I understand that Hong Kong still has a long way to go to establish a virtual asset ecosystem, but I believe that as the virtual asset fintech community gathers in Hong Kong, the pace of development will accelerate,” Leung added.

Hong Kong continues to make major leaps in blockchain adoption. This month, it revealed that its tech ecosystem Cyberport had admitted over 150 Web3 firms within the past 12 months. The state’s banking regulator has also been pushing major banks, including Standard Chartered (NASDAQ: SCBFF) and HSBC (NASDAQ: HSBC), to accept digital asset clients.

Watch: What’s next for digital asset exchanges & investment?