Hong Kong Regulator Recognizes Bitcoin’s Resilience
Jimmy Aki
June 6, 2024 13:40 EDT
Julia Leung, the CEO of Hong Kong’s Securities and Futures Commission (SFC), has acknowledged Bitcoin’s strength in the face of market volatility.
At the Greenwich Economic Forum, Leung, the head of the Hong Kong regulatory body, openly admitted to Bitcoin’s resilience. As the leading cryptocurrency for the past 15 years, she recognized that Bitcoin has weathered numerous market cycles of “boom and bust.”
In the midst of ongoing debates regarding the intrinsic value of cryptocurrencies, Leung confirmed that experts and banking leaders have been engaged in discussions over the value of Bitcoin and Ether.
Reflecting on the trajectory of Bitcoin, she noted its ability to serve as an alternative asset. However, Leung emphasized her support for Distributed Ledger Technology (DLT) – the underlying framework of Bitcoin – rather than the actual cryptocurrency itself.
Leung highlighted the benefits of DLT, emphasizing its potential to enhance the distribution, clearing, settlement, and custody of physical assets while reducing costs.
While acknowledging the potential of digital collectibles and non-fungible tokens (NFTs) powered by DLT, Leung also cautioned that these assets may be a passing trend. She recognized the possibilities of tokenization leading to broader financial inclusion, fractionalization, custody, and ownership on the blockchain.
She stressed the importance of blockchain networks evolving and achieving maturity to ensure seamless cross-border interoperability among financial institutions for the full realization of the technology’s benefits in the financial sector.
In her address at the Forum, Leung also commended the growth of Hong Kong’s Web3 ecosystem while cautioning about the speculative nature of virtual assets and their susceptibility to price fluctuations. She clarified that her statements should not be interpreted as an endorsement.
With the latest acknowledgment from the SFC’s leader, there is optimism for clarity on regulations and adoption in the near future.
In the realm of blockchain regulations in Hong Kong, Leung’s remarks coincided with the official launch of the SFC’s licensing program for cryptocurrency trading platforms. This initiative mandates that all exchanges serving Hong Kong’s retail investors obtain the necessary licenses.
The SFC has implemented various measures to oversee the cryptocurrency space, aiming to meet investor demand for virtual assets while ensuring their protection.
Following the announcement of on-site inspections of crypto platforms post the licensing deadline on June 1, the SFC warned that any unlicensed virtual asset trading platforms in Hong Kong would be deemed a criminal offense.
Despite the crackdown on unlicensed crypto entities in Hong Kong, the approval of spot Ethereum and Bitcoin exchange-traded funds (ETFs) by the SFC has been viewed positively, positioning Hong Kong as a cryptocurrency-friendly hub in the Asian region.