Hong Kong to explore cryptocurrency laws and establishes dedicated subcommittee

Cryptocurrencies have made their mark on the fintech sector in several nations, but have faced regulatory challenges due to the associated risks and volatile nature of the cryptocurrency market. Hong Kong is the latest to join the list of Asian regions that are accelerating efforts to establish a regulatory framework to oversee the cryptocurrency sector. Hong Kong’s Legislative Council over the weekend announced the creation of a new subcommittee, which will devote its time to drafting detailed cryptocurrency laws.

Hong Kong aims to become a crypto hotspot

Hong Kong authorities have prioritized making the region profitable Web3 Enterprises. After all, despite the financial risks associated with digital assets, the cryptocurrency market currently has a valuation of $2.26 trillion (approximately Rs. 1,88,68,265 crore).

HKSAR member Johnny NG Kit-Chong took to X to announce the creation of the cryptography-focused subcommittee. In his post, Kit-Chong revealed that the subcommittee will explore the regulations from two aspects: one regarding Web3 policies and the other on virtual assets.

From a Web3 policy perspective, the subcommittee is tasked with balancing Web3’s growth within a regulatory framework. THE artificial intelligence The (AI) sector will also be promoted by this newly formed body.

Policy work on virtual assets, meanwhile, will revolve around investor and consumer protection, which could lead to an increase in market confidence.

Other responsibilities assigned to the subcommittee, according to Kit-Chong, include evaluating the “potential application scenarios and risks of stablecoins in Hong Kong and regulatory systems that ensure financial stability without stifling innovation.”

The body will also spend time exploring the demand for professional custody services due to the rise of virtual assets in Hong Kong and conducting research on corresponding custody methods and regulatory measures.

Committee members are also inviting the public to provide suggestions that they believe can help them oversee Web3 elements such as decentralized autonomous organizations (DAOs).

“I welcome suggestions from the global Web3 industry. I will study them in detail and summarize them to present to the government through the Legislative Council platform,” said the HKSAR Legislative Council member.

What is Hong Kong’s position on cryptocurrencies?

Hong Kong allows trading and holding cryptocurrencies, but no cryptocurrencies are legal tender there. Crypto activities related to individual investors are not subject to taxes, however, companies carrying out professional crypto activities are subject to income tax.

As per Triple-a.ioover 2.45 lakh people, or 3.27% of the total population of Hong Kong, currently own cryptocurrencies.

Last month, the Securities and Futures Commission (SFC) of Hong Kong announced that it would carry out checks to verify whether all crypto exchanges complied with the Anti-Money Laundering and Terrorist Financing Ordinance (AMLO) on a priority basis.

Previously in April, Hong Kong followed the US lead in approving Bitcoin and Ether ETFs, aiming to increase institutional investors’ engagement with these otherwise risky digital assets.

Affiliate links may be automatically generated – see our Ethics statement for details.

Fuente