Category Archives: Hong Kong Blockchain Association

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Hong Kong Regulator: Sandbox First, Crypto Licences Could Follow

Hong Kong’s Securities and Futures Commission (SFC) is proposing a sandbox approach to cryptocurrency regulation. The idea was tabled by SFC chief executive Ashley Alder during a speech to delegates at this week’s Hong Kong Fintech Week 2018.

Alder said Hong Kong has seen the arrival of some of the worlds biggest platforms but there exists “a sizeable population of investors who have an interest in trading virtual assets through unregulated trading platforms”. A sandbox approach would allow the regulator to discover if it would be appropriate for crypto exchange operators to be regulated, Alder argued.

“If, and only if, we decide at the Sandbox stage that we should regulate, we would consider granting a license… the platform would then be subject to intensive reporting and monitoring to ensure that strict internal controls operate as expected and investor interests are protected.”

In a recent survey conducted by the Hong Kong Blockchain Association (HKBA), it was revealed that 23% of Hong Kong residents would consider investing in cryptocurrencies, given a recession. The response was based on the fact that many respondents anticipated a downturn in the world economy within the next year. Reportedly, a large portion of those surveyed would consider investing in cryptocurrency, despite their current concerns about digital currencies outweighing their potential advantages. Relevant to SFC concerns expressed at the Hong Kong Fintech Week was the fact that 60% of the respondents indicated that they felt that clear regulations and proper licensing laws were needed for cryptocurrency exchanges.

Alder said that the SFC had plans to clarify new regulatory standards for fund managers and that those investors coming on board with a mixed portfolio of more than 10% of virtual assets would need to follow the new requirements, regardless of whether the assets were “securities” or “futures contracts”. In the meantime, only professional investors should be allowed to trade until further guidance from the regulator is made public. The sandbox idea appears to fill in the cracks until more lasting regulatory plans can be formulated. In February the SFC said that it would crack down on unlicensed cryptocurrency exchanges.

Meanwhile, the blockchain sector is beginning to feel the pinch with a lack of qualified professionals to fill positions. A “talent list” has been issued by the Government of the Hong Kong Special Administrative Region in which it states that it needs “quality people from around the world in a more effective and focused manner to support Hong Kong’s development as a high value-added and diversified economy”. Among the 11 professions on the new list are those with DLT skills.

 

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1 in 4 Hong Kong Residents Would Invest in Crypto

A survey conducted by the Hong Kong Blockchain Association (HKBA) has revealed that 23% of Hong Kong residents would consider investing in cryptocurrencies, given a recession.

The response was based on the fact that many respondents anticipated a downturn in the world economy within the next year. Reportedly, a large portion of those surveyed would consider investing in cryptocurrency, despite their current concerns about digital currencies outweighing their potential advantages.

Regulation was an issue with almost 60% of respondents, many of them indicating that clear regulations and proper licensing laws were needed for cryptocurrency exchanges. Some suggested that examples such as Japan and Singapore were models worthy of Hong Kong regulators worth considering.

Of the 46% suggesting that hardship may be around the corner due to an economic downturn, some would consider investing in cryptocurrency. A quarter of all those surveyed suggested they would invest but only in times of economic hardship but currently have no need.

In other news from the country, the Hong Kong Monetary Authority (HKMA), the region’s currency board and central bank, is launching a live blockchain-based trading platform in September, backed by HSBC, Bank of China, ANZ, DBS Bank, Bank of East Asia, and the Hang Seng Bank. Howard Lee, HKMA’s deputy chief executive, has suggested that it will be the largest multi-bank blockchain project of its kind in Hong Kong.

The Forbes 30 under 30 Asia list was released earlier this year with many of the drivers in the financial world located in Asia. The list showcased a new generation of talent from venture capital to the latest disruptive digital technologies. Many of this year’s nominees had embraced cryptocurrency ventures.

Two on this year’s list are Ryan Zhou, 23, and Myunghun Cha, 28. Zhou founded Australian personal finance platform Coinjar, simplifying the trading of Bitcoin which now has a turnover of USD 758 million with 350,000 members.

South Korean Cha founded Coinone, now one of the country’s largest exchanges trading around USD 10 billion a month and earning over USD 70 billion in 2017.

 

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