Hong Kong’s crypto licensing system classifies assets as securitized or non-securitized for targeted regulatory compliance.
The EU, UK, and Singapore lead crypto regulatory innovation with laws addressing market volatility and systemic risks.
Consistency and global collaboration are the key strategies of the Financial Stability Board involved in supporting the establishment of crypto regulation around the world.
The People’s Bank of China (PBoC) has published the China Financial Stability Report emphasizing Global trends regulating cryptocurrency. This paper focuses on the increased attention of the authorities to unregulated sectors and threats to financial system stability. It is argued that Hong Kong’s decision to actively manage licenses of crypto-assets is a major positive in the process of bringing the region in compliance with global tendencies.
https://twitter.com/WuBlockchain/status/1873539526280495603
Dual Licensing: System Applied in the Hong Kong Law
Hong Kong is using a dual licensing system to regulate virtual assets properly. Securitized financial assets fall under section of the Securities and Futures Ordinance whereas non-securitized tokens fall under section of the Anti-money Laundering Ordinance. Big banks like HSBC and Standard Chartered need to bring crypto exchanges into the scope of what they are checking on a regular basis. This regulatory agenda seeks to reduce possible hazards whilst promoting openness.
Global Crypto Regulations get stricter
The report highlights regulatory adjustments in over 51 countries that have introduced bans or stricter rules for crypto assets. In the United States, the Securities and Exchange Commission (SEC) has enhanced scrutiny, rejecting numerous Bitcoin ETF applications before approving a spot Bitcoin ETF in early 2024. The European Union has approved the Crypto-Asset Market Regulation Act, set for implementation by the end of 2024, to create uniform regulations across member states.
Several regions have introduced unique regulatory measures for digital assets. The United Kingdom expanded its Financial Services and Markets Act to include crypto, while Singapore implemented a Stablecoin Regulatory Framework to ensure stablecoin issuers meet specified criteria. Japan’s Funds Settlement Act restricts stablecoin issuance to licensed financial institutions to prevent misuse and enhance stability.
The Financial Stability Board has brought out the best global standards for controlling cryptocurrencies. Its framework, released in 2023, emphasizes consistent regulations for financial activities regardless of the underlying technology. The roadmap jointly designed with the International Monetary Fund (IMF) outlines steps to address macroeconomic risks, close data gaps, and strengthen global cooperation.