According to Reuters, Hong Kong is pivoting toward a friendlier regulatory regime for cryptocurrencies. The local government is planning to enable retail investors to trade crypto as well as crypto exchange-traded funds. This move may help Hong Kong revive its fintech hub status.
Earlier, the government proposed to allow crypto trading only to professional investors. However, this initiative was severely criticized. For this reason, the authorities may give retail investors "a suitable degree of access" to virtual assets.
"We want to make our policy stance clear to the global market, to demonstrate our determination to explore fintech with the global virtual asset community," Financial Secretary Paul Chan said.
The government will also scrutinize property rights for tokenized assets and explore the possibility of legalizing smart contracts – automated transactions whose results depend on pre-programmed inputs.
These measures could help the authorities develop real estate security token offerings (STOs). STOs represent ownership interests or entitle holders to receive income or dividends from real assets.
"Industry participants want to see consistency in the global regulatory regime, otherwise there will be opportunities for bad actors to exploit loopholes in jurisdictions with less rigid laws," Andy Mehan, the chief compliance officer for APAC at US crypto exchange Gemini, pointed out.
The move taken by the government to legalize the retail trade in cryptocurrencies may sour relations with mainland China, which has imposed a blanket ban on crypto trade.
