In 2023, at least eight companies will be granted licenses. This will give them a regulatory framework that will make sure they follow strict rules. The new rules will apply to all crypto exchanges that trade certain large-capitalization tokens, but they won't cover non-fungible tokens (NFTs), which are considered securities. The move is part of Hong Kong's efforts to strengthen its position as a hub for financial innovation. It is also intended to attract more crypto businesses to the region.
Angelina Kwan, CEO of Stratford Finance and a former regulator at the Hong Kong Securities and Futures Commission has confirmed that Hong Kong will issue licenses to at least eight crypto companies by the end of 2023. The announcement comes in response to the growing interest of crypto firms in establishing operations in the city. The new licensing program will take effect in June, and Kwan emphasized that internal controls and security will be crucial factors in securing a license. The licensing program is expected to offer a level playing field for crypto firms to operate in Hong Kong, ensuring that they comply with stringent regulations and providing greater transparency and accountability to investors.
According to Kwan, CEO of Stratford Finance and former regulator at the Hong Kong Securities and Futures Commission, at least eight crypto companies are expected to be granted a license during the second half of the year under Hong Kong's new crypto licensing regime. Kwan highlighted that internal controls and security are key aspects of obtaining a license. This move comes after Hong Kong began tightening regulations following the collapse of FTX, which led regulators to introduce a new set of regulations effective from June 2023.
Hong Kong is attracting significant interest from crypto businesses, with over 80 reportedly looking to establish operations in the region, and state-owned banks expressing interest in working with crypto firms. Experts believe that Hong Kong's strict crypto regulations offer benefits in terms of security and regulatory clarity, and the new licensing regime is expected to provide a level playing field for crypto firms to operate in Hong Kong while ensuring compliance with stringent requirements.
By issuing licenses, Hong Kong's regulators can better monitor the activities of crypto firms and protect investors. This move reflects the growing trend of countries introducing regulations to manage the crypto sector, highlighting the importance of digital assets in the global financial landscape. Ultimately, the new licensing regime is expected to provide greater transparency and accountability to investors, while enabling Hong Kong to further establish itself as a hub for financial innovation.