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Writer's pictureGoodness Chimezie

Hong Kong Is Now Courting Crypto. What’s Behind the Switch?

News on Crypto Street


Have you heard about Hong Kong's recent developments regarding cryptocurrency? Interestingly, amidst global authorities' increasing scrutiny of crypto, Hong Kong is taking a different approach. With a new government in place since October, the city unveiled a regulatory framework for crypto finance in February, which includes allowing retail investors access to "large-capitalization" tokens.


Financial Secretary Paul Chan announced the government had budgeted HK$50 million ($6.5 million) towards the development of a "Web3" ecosystem.

The sector accounts for close to a quarter of the gross domestic product, so authorities can't afford to keep out the wider range of transactions that cryptocurrencies might eventually spawn. The new regulations require firms to establish a Hong Kong presence by June 1, then apply for licensing by June 2024. This is causing a rush into Hong Kong, with some larger players experiencing a fear of missing out.


Although Hong Kong may be more interested in crypto's application to traditional financial services, they need to take a risk on crypto retail trading to foster those nascent applications without a brokerage business that is vibrant if troubled. Singapore's experience in trying to nurture a trustworthy crypto business is not too encouraging.


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