Hong Kong is set to revolutionize the crypto market with a new license, according to OSL CFO
By Hongji Feng
Updated on June 19, 2024, at 02:49 EDT
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Reading time: 1 min
The Chief Financial Officer of the Hong Kong-based digital asset exchange OSL, David Wu, has revealed that the government is considering introducing a new license to advance crypto regulation in the region.
As reported by Ta Kung Pao, the Hong Kong government is planning to establish a new licensing system specifically for crypto-fiat conversions. This move is part of a larger strategy to clarify regulations and provide support for the virtual asset market.
Hong Kong’s attractive tax policies have already been drawing in investors, and Wu believes that the introduction of the new license will further boost investor confidence and attract more international players to the market. This regulatory progress is seen as a crucial step in solidifying Hong Kong’s position as a leading virtual asset hub in Asia.
Wu highlighted several advantages that Hong Kong has over other countries in terms of global competition. One key advantage is its favorable tax environment – unlike countries like Japan and Australia, which impose capital gains taxes on virtual assets, Hong Kong does not have such taxation, making it a lucrative destination for global investors.
In countries like Japan, where the comprehensive tax rate can go up to 50%, and Australia, where it can reach 40%, the impact on investment returns is significant.
Furthermore, Hong Kong’s banks have a more supportive stance towards virtual assets compared to banks in other countries. Due to concerns about money laundering risks associated with virtual assets globally, many banks are hesitant to work with institutional investors in this sector. In Japan, for example, numerous major banks refuse to open accounts for these funds.
In contrast, Hong Kong banks have a more open-minded approach, welcoming institutions specializing in virtual asset investments and making banking operations smoother for these entities.
The report also noted that the development of regulations in the region has increased investor confidence by providing clearer guidelines and services. Regulated and supervised platforms can offer better protection to retail investors.
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