Cryptocurrencies have made their mark on the fintech sector in a number of nations however have met with regulatory challenges due to the related dangers and risky nature of the crypto market. Hong Kong is the newest to affix the record of Asian areas which might be accelerating efforts to ascertain a regulatory framework to supervise the crypto sector. The HKSAR Legislative Council, over the weekend, introduced the establishing of a brand new subcommittee, that can dedicate its time to drafting detailed crypto legal guidelines.
Hong Kong goals to turn into crypto hotspot
Hong Kong authorities have prioritised making the area profitable for Web3 companies. After all, regardless of the monetary dangers concerned with digital property, the crypto market presently sits atop a valuation of $2.26 trillion (roughly Rs. 1,88,68,265 crore).
Johnny NG Kit-Chong, a member of the HKSAR, took to X to announce the creation of the crypto-focussed subcommittee. In his submit, Kit-Chong disclosed that the subcommittee will discover rules from two features – one relating to Web3 insurance policies and the opposite round digital property.
From the viewpoint of Web3 insurance policies, the subcommittee is tasked with balancing the expansion of Web3 beneath a regulatory framework. The synthetic intelligence (AI) sector can even be fostered by this newly fashioned physique.
Policy work round digital property, in the meantime, will revolve round defending traders and shoppers that would result in a lift in market confidence.
Other tasks assigned to the subcommittee, as per Kit-Chong, embrace assessing “potential application scenarios and risks of stablecoins in Hong Kong, and regulatory systems that ensure financial stability without stifling innovation.”
The physique can even commit time to exploring the demand for skilled custody companies because of the rise of digital property in Hong Kong and conducting analysis round corresponding custody strategies and regulatory measures.
The members of the committee are additionally inviting suggestions from the general public, which they suppose might help them oversee Web3 components like decentralised autonomous organisations (DAOs).
“I welcome suggestions from the global Web3 industry. I will study them in detail and summarise them to present to the government through the Legislative Council platform,” the HKSAR Legislative Council member mentioned.
Where does Hong Kong stand on crypto?
Hong Kong permits the buying and selling and holding of cryptocurrencies, however no cryptocurrency is recognised as authorized tender there. Crypto actions associated to particular person traders usually are not topic to taxes, nonetheless, companies indulging in skilled crypto actions are topic to earnings tax.
As per Triple-a.io, over 2.45 lakh individuals, or 3.27 % of Hong Kong’s complete inhabitants, presently personal cryptocurrencies.
Last month, Hong Kong’s Securities and Futures Commission (SFC) introduced that it might be conducting checks to see if all crypto purposeful exchanges have been adhering to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) on precedence.
Prior to this in April, Hong Kong adopted the US to approve ETFs associated to Bitcoin and Ether, aiming to enhance the engagement of institutional traders with these in any other case dangerous digital property.
