Press Release

Hong Kong to Regulate Cryptocurrency by July 2022: Report

The Hong Kong Monetary Authority (the city-central state’s bank) plans to establish a new regulatory regime for digital assets by July. The China special administrative region wants to follow Singapore’s lead and become a global cryptocurrency hub.

According to Bloomberg, Hong Kong’s central bank will approach the cryptocurrency industry from three perspectives: investor protection, comprehensive rules for authorized institutions on how to deal with digital assets, and special attention to stablecoins.

The Hong Kong Monetary Authority (HKMA) is willing to investigate stablecoins further. The institution said in a recent press release that such assets pose “possible risks to monetary and financial stability.” The central bank stated that it had been closely monitoring the evolution of these assets and that it “would like to proactively share” its views with the general public.

The HKMA’s Chief Executive, Mr. Eddie Yue, stated that the bank is awaiting feedback from stakeholders on the recent proposals. He also stated that the cryptocurrency industry will be governed by a “risk-based, pragmatic, and agile regulatory regime.”

For the time being, the Chinese special administrative region employs a “opt-in” rule for local digital asset exchanges, which means they can apply to be supervised. This model, according to Joshua Chu, a consultant at ONC Lawyers, is ineffective, and the government should reconsider its policy.

In May 2021, the local authorities plan to implement a rule limiting cryptocurrency trading to millionaires (around 7 percent of the total population of the megapolis). Then-Treasury Secretary Christopher Hui called the move a calculated one.

Last week, the cryptocurrency exchange Coinsuper became one of the most talked-about topics in the city-state after dozens of customers complained about not being able to withdraw their funds. Some of the affected users have even sought help from the police.

Coinsuper executives could not be reached for comment on the situation. At the same time, the company’s Telegram chat administrator stopped responding to questions about failed transactions more than a month ago.

Despite these issues, Coinsuper’s trading application and website are still operational.