The Hong Kong Securities and Futures Commission (SFC) plans to allow retail trading in a selection of cryptocurrencies in order to offer regulatory clarity to the crypto market, according to Reuters.
SFC CEO Julia Leung said at a panel discussion at the Asian Financial Forum in Hong Kong that the SFC plans to propose a subset of the tokens that will be approved.
According to Leung, only “highly liquid” assets will be on the approved list, and that certainly includes Bitcoin, the most liquid crypto asset on the market, as reported by the South China Morning Post.
The Hong Kong virtual asset service provider’s regime will focus on investor protection to avoid another case like the one with FTX last November, according to Leung.
“Over the past year, virtual assets have gone from peak to low levels [de preços]. The good thing is that when the foam is removed from the system like platforms and some tokens collapse, it focuses the minds of investors and sellers on investor protection.
Digital currencies
Signals from Hong Kong about the territory’s aspirations to legalize cryptocurrency have been mixed in recent months. In the past year, Hong Kong has shown signs of easing strict regulations to become a more crypto-friendly environment.
The Office of Financial Services and the Treasury said in October that it would be open to allowing retail clients to trade cryptocurrencies or endorse a cryptocurrency exchange-traded fund (ETF).
However, in November, Leung called for strict rules for cryptocurrency companies, highlighting the volatility of digital assets and the threat posed by their ties to traditional financial services.
With the recent decision by the SFC to allow retail trading in select cryptocurrencies, Hong Kong appears to be positioning itself as a region looking to balance investor protection with innovation and growth in the cryptocurrency market.
“This could attract more investors and companies to the cryptocurrency market in Hong Kong and cement the region’s position as a major global financial centre,” said Jamie Crowley.