Industry organization Global Digital Finance has opposed the introduction of a law banning cryptocurrency trading for retail traders in Hong Kong.
Global Digital Finance includes the cryptocurrency exchanges BitMEX, Huobi, Coinbase and OKCoin. The group believes that if the law comes into force, it will severely restrict the legal trading of cryptocurrencies among professional investors, blocking access to the market for 93% of the local population. According to a recent CitiBank survey, about 504,000 people (7%) have enough assets to become professional investors. The proposed bill will encourage traders to use unregulated platforms.
In November, the Hong Kong Securities and Futures Commission (SFC) planned to introduce regulation of all cryptocurrency exchanges in the administrative region to tighten measures to combat money laundering and terrorist financing. The initiative aims to ensure that Hong Kong’s cryptocurrency regulations comply with the recommendations of the Financial Action Task Force (FATF). In January, the Hong Kong authorities consulted with members of the public and industry players on this issue.
The consultation period has now come to an end, and the bill is expected to be submitted to the Legislative Council of Hong Kong at the end of the year. However, the chairman of the advisory board of Global Digital Finance, Malcolm Wright, said that the ban on cryptocurrency trading for retail traders exceeds the requirements of the FATF. This suggests that Hong Kong is taking an excessively tough stance on digital assets. Wright cited the example of Singapore, the United Kingdom, and the United States, which, as members of the FATF, allow retail traders to trade cryptocurrencies.
The Bitcoin Association in Hong Kong also said that restricting retail traders ‘ access to bitcoin would be an excess of government authority. Offer restrictions may apply and cryptomate. This will significantly slow down the development of innovation and limit access to financial services. At the same time, Hong Kong regulators have a positive attitude to the digital currencies of central banks. In July, the Hong Kong Monetary Authority (HKMA) expressed its readiness to cooperate with the People’s Bank of China (PBOC) test the digital yuan for international payments.