Hong Kong Regulator Recognizes Bitcoins Strength

Hong Kong’s financial regulator recognizes the enduring strength of Bitcoin


By Jimmy Aki
Published on:
June 6, 2024 13:40 EDT
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Reading time: 2 minutes


Julia Leung, the CEO of the Securities and Futures Commission (SFC) in Hong Kong, has acknowledged the resilience of Bitcoin in the face of market volatility.
Acknowledgment of Bitcoin’s Strength by Hong Kong’s SFC
During the Greenwich Economic Forum, the head of the Hong Kong regulatory body openly acknowledged the staying power of Bitcoin. As the leading cryptocurrency in terms of market capitalization for the past 15 years, she agreed that Bitcoin has weathered numerous cycles of highs and lows.
This recognition comes at a time when there is intense debate surrounding the true value of cryptocurrencies. Leung noted that financial experts and banking professionals have been engaged in ongoing discussions about the value of Bitcoin and Ether.
Regarding the trajectory of Bitcoin, she highlighted its resilience as an alternative asset. However, Leung clarified that she supports the underlying technology of Bitcoin, known as Distributed Ledger Technology (DLT), rather than the actual cryptocurrency itself.
Leung emphasized the benefits of DLT, stating that it has the potential to enhance the distribution, clearing, settlement, and custody of physical assets while reducing costs.
Despite her positive outlook on DLT, Leung cautioned that digital collectibles and non-fungible tokens (NFTs) could be a passing trend, even though they are built on the same technology. She acknowledged that tokenization could lead to greater financial inclusion, fractionalization, custody, and ownership, all facilitated on the blockchain.
However, Leung stressed the importance of growth and maturity in blockchain networks to ensure seamless cross-border interoperability among financial institutions. She highlighted the need for these networks to reach full potential in the financial sector.
In her speech at the Forum, Leung also recognized the growth of Hong Kong’s Web3 ecosystem but warned about the speculative nature of virtual assets and their susceptibility to price fluctuations. She made it clear that her comments should not be interpreted as an official endorsement.
Following Leung’s remarks, a user expressed optimism that regulatory clarity and widespread adoption are on the horizon.
Regulations on Blockchain in Hong Kong
Leung’s statements coincide with the official launch of the SFC’s licensing program for cryptocurrency exchanges, requiring all platforms serving retail investors in Hong Kong to obtain the necessary licenses.
The SFC has implemented various safeguards to regulate the cryptocurrency space in response to investor demand for virtual assets while ensuring investor protection.
On May 28, the SFC announced plans to conduct on-site inspections of cryptocurrency platforms after the licensing deadline on June 1. Any unlicensed virtual asset trading platforms in Hong Kong post-deadline will 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, signaling a cryptocurrency-friendly environment in Hong Kong within the Asian region.
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