In recent times, the Hong Kong government has made significant progress in the fintech sector. Eddie Cheung, Deputy Chief Executive of the Financial Services and the Treasury Bureau, mentioned during Fintech Week that Hong Kong was one of the early adopters globally in issuing licenses for virtual banks, virtual insurers, and virtual asset trading platforms. In the future, the government aims to further enhance the regulatory framework according to market developments to ensure the full protection of customer assets.
Cheung also noted that the government plans to expand the regulatory scope of virtual asset trading to cover trading activities conducted outside virtual asset trading platforms. Additionally, a regulatory framework for stablecoin issuers will be jointly released by the Financial Services and the Treasury Bureau and the Securities and Futures Commission, inviting industry feedback through a consultation paper.
In terms of empowering the real economy, Cheung emphasized that Web 3 technology can address many challenges in finance, education, business operations, and daily life, reducing costs and improving efficiency. Hong Kong has already begun integrating blockchain into business operations, driving the insurance industry with the government-supported MIDAS blockchain vehicle insurance certification system. It also promotes trade linkage, utilizing blockchain to expedite trade financing and enhance efficiency. Moreover, virtual assets combined with traditional finance began trading virtual asset futures on the Hong Kong Stock Exchange at the end of last year. This year, tokenized green bonds were issued, and collaboration between the Hong Kong Monetary Authority and the People's Bank of China on cross-border digital currency payments entered the second phase of testing, aiming to promote practical applications related to blockchain and Web 3 at different levels.
The Securities and Futures Commission and the Hong Kong Monetary Authority jointly issued a "Joint Circular on Intermediaries' Participation in Activities Related to Virtual Assets." It emphasizes that licensed corporations and registered institutions (collectively referred to as "intermediaries") engaging in activities related to tokenized securities must adhere to the "conduct standards and guidelines periodically issued by the Securities and Futures Commission concerning the conduct of licensed corporations and registered institutions in tokenized securities." The "Circular on Tokenized Securities" responds to this requirement. Its content covers the issuance and trading of tokenized securities, as well as activities such as providing advice and asset management for tokenized securities. It provides more explicit regulatory guidance for intermediaries engaged in activities related to tokenized securities, helping them manage the new risks brought by tokenization more clearly. The "Circular on Tokenized Securities" also reflects the strong support of the Hong Kong government for the crypto market.
With the development of the global blockchain market, the interest of traditional financial institutions in the crypto asset market is increasing. Hong Kong's clear regulatory openness injects a boost for traditional financial institutions entering the crypto asset market, paving the way for the healthy and orderly development of related markets. The Hong Kong government will continue to actively promote the application of blockchain and Web 3 technology in the real economy, injecting new momentum into the economic development of Hong Kong.
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