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Hong Kong Government Gives Thumbs Down to Own Crypto

In an announcement on 30 May, the Hong Kong Monetary Authority (HKMA) announced that it currently has no plans to issue a central bank digital currency (CBDC), reports Coindesk.

In April of last year, the HKMA first revealed, in a response to legislators, that the banking authority has started “research and a proof-of-concept work on central bank digital currency”, which would be completed by the end of 2017 and then acted on appropriately later.

Acting secretary for Financial Services and the Treasury, Joseph Chan, claimed that the completed HKMA research revealed that Hong Kong would not particularly profit from adopting a CBDC compared to some other jurisdictions.

“In the context of Hong Kong, the already efficient payment infrastructure and services make CBDC a less attractive proposition. The HKMA has no plan to issue CBDC at this stage but will continue to monitor the international development.”

Hong Kong has been experiencing a heightened level of concern around the cryptocurrency space due to high levels of fraud. Research recently revealed that the percentage of financial crime involving cryptocurrencies was in fact comparatively low, when compared to other methods of, largely organized, crime in the city.

Businesses in Hong Kong have long complained that lending banks’ concerns about money laundering have severely curtailed available customer services. This has also impacted the cryptocurrency industry. The current government stance is that virtual currencies’ largely unregulated position makes them a risk, pointing out that unlike institutions offering fiat currencies, cryptocurrencies have no specific regulation.

Unlike China, rather than ban cryptocurrencies, the Hong Kong government has chosen the educative path with The Financial Service Treasury Bureau (FSTB) and the Investor Education Centre (IEC), all subsidiaries of the Securities and Futures Commission (SFC), teaming up to launch a campaign which began earlier this year, including a TV campaign, warning Hong Kong citizens to stay away from cryptocurrency.


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