The city of Hong Kong, which is a special administrative region of China, is taking steps to distance itself from the mainland’s blanket crypto ban.
The government has plans to introduce a bill to regulate cryptocurrencies according to Elizabeth Wong, head of fintech at the Securities and Futures Commission (SFC), CoinTelegraph wrote.
One of the regulator’s projects involves letting retail investors make direct investments in virtual assets, Wong stated during an InvestHK panel on Monday, October 17.
Investors must be worth at least $1m
Over the past four years, the SFC only allowed professional investors to trade crypto on centralized exchanges, so these plans reflect a significant shift from that stance.
However, eligibility criteria are impressive to say the least: a retail investor must have a portfolio worth at least $1 million to be able to trade crypto. As of September last year, this brings eligible candidates down to around 7% of the population of Hong Kong.
Time to change direction
According to Wong, the crypto industry has increased compliance over the past four years. She pointed out it was time for Hong Kong to change its stance on crypto, “We think that this may be actually a good time to really think carefully about whether we will continue with this professional investor-only requirement.”
Building on previous legal initiatives
Wong made reference to several other legal initiatives targeting crypto development. In January, officials introduced a policy to let service providers sell specific derivatives related to crypto. The SFC is also considering allowing retail investors to invest in crypto-related ETFs.
City launches $3.8b fund to attract businesses
These developments are occurring against the backdrop of the launch of a massive fund to bring businesses back to Hong Kong. The launch of the $3.8 billion fund was announced on October 19. A tense political climate and strict lockdowns led to a huge talent exodus.
Hong Kong authorities also announced plans to embrace metaverse, NFTs, and other emerging technologies, transforming the city into a global hub of virtual assets.
Best-prepared for crypto adoption
The city has seen some success in terms of adopting crypto according to some reports. A study by Forex Suggest from July this year ranked it the best-prepared territory for mainstream crypto adoption.
The study considered the number of crypto ATMs, startup culture, pro-crypto regulations, and other factors.