Author: Bitkoala Finance
The Hong Kong Securities and Futures Commission (SFC) does need to remain sharp and flexible in regulatory innovation in the face of the development of the cryptocurrency market. The United States has a strong first-mover advantage and market share in the field of cryptocurrency. Therefore, if Hong Kong does not innovate and improve its cryptocurrency regulation, it may be at a disadvantage in this "crypto war".
Here are some innovative strategies that the SFC could consider:
Clear Regulatory Framework: Develop and publish a clear regulatory framework for cryptocurrencies and blockchain technology to provide market participants with clarity on compliance requirements and reduce uncertainty.
Sandbox Program: Introducing a fintech regulatory sandbox program to allow cryptocurrency and blockchain companies to test their products and services in a controlled environment, thereby promoting innovation and technological development.
Cross-border cooperation: Strengthen cooperation with regulators in other countries and regions, especially with countries that have extensive experience in cryptocurrency regulation, such as the United States and Singapore, to share experience and information and develop consistent international standards.
Investor protection: While promoting innovation, we focus on protecting the interests of investors and ensuring that cryptocurrency trading platforms and service providers have sufficient financial strength and risk management capabilities.
Education and advocacy: Enhance public and investor understanding of cryptocurrencies and blockchain technology, and help them recognize the risks and opportunities through education and advocacy activities.
Through these measures, the Hong Kong Securities and Futures Commission can find a balance in the cryptocurrency market, promoting innovation and development while maintaining market stability and investor interests, thereby gaining a favorable position in global competition.
Industry voice: The attitude of Wang Yang, vice president of the Hong Kong University of Science and Technology, is shocking
Recently, Wang Yang, Vice President of the Hong Kong University of Science and Technology, answered questions from the media at the first HashKey New Vision Forum and expressed his positive support and openness to the development of cryptocurrency and blockchain technology. He believes that blockchain technology and cryptocurrency represent the future financial and technological trends, and Hong Kong should actively embrace these innovations to enhance its competitiveness in the global technology and financial fields. His main views and discussions are as follows:
Importance of technological innovation: Wang Yang stressed that blockchain technology is not limited to cryptocurrency, and its potential applications include supply chain management, digital identity, smart contracts and other fields. He believes that Hong Kong should promote the development and application of blockchain technology through policy support and technological innovation.
Education and talent cultivation: Wang Yang advocates strengthening the setting of blockchain and cryptocurrency-related courses in higher education to cultivate more professional talents and promote the development of the industry. He believes that universities should become the forefront of blockchain technology research and innovation, providing a combination of theoretical support and practical applications.
Balance between regulation and innovation: Wang Yang believes that regulators should maintain flexibility, protecting the interests of investors while avoiding excessive regulation that stifles innovation. He suggests establishing a sandbox mechanism to allow companies to test and develop new technologies in a controlled environment, thereby promoting innovation while ensuring safety.
Wang Yang also said that Hong Kong should not drive away cryptocurrency companies that do not do business with Hong Kong citizens, as they will also bring vitality to Hong Kong's virtual asset ecosystem; a complete ban on mining is very unwise, resulting in a $4 billion tax dividend to the United States. It is better to let state-owned enterprises mine or invest in them to ensure risk control.
In addition, he suggested that China may rethink what digital assets are and whether we should embrace digital assets. In the development of the "Belt and Road" countries, we will eventually be able to embark on the path of RWA tokenization.
Wang Yang also pointed out that the problem now is that once cryptocurrency is mentioned, it immediately becomes a difficult-to-control situation. But China's strategy may really need to go this way. If Trump comes to power, China will need to re-evaluate all these policies in a very short time.
Wang Yang admitted that he thought Bitcoin and blockchain were scams twice in 2012 and 2014, and therefore missed the opportunity; Hong Kong's pace in services is too slow, and we seem to be satisfied with the status quo.
Hong Kong should have a higher goal, determination, or even a belief, to lead the development of the entire region, including the future direction of blockchain technology.
The attitude of the US political and crypto circles towards ensuring that Web3 happens within the US
In the United States, politicians and crypto circles have diverse attitudes toward Web3 (decentralized networks based on blockchain), reflecting the need to balance support for innovation with regulation.
Political attitude
Support for Innovation: Supporters: Some politicians (such as Senator Cynthia Lummis) actively support blockchain technology and cryptocurrencies, believing that they can promote economic development and technological innovation. They advocate the establishment of a clear and innovation-friendly regulatory framework.
Policy push: These supporters push for legislation that provides legal status and regulatory standards for cryptocurrencies and blockchain technology in order to attract more businesses and investment.
Strengthen supervision
Critics: Some politicians, such as Senator Elizabeth Warren, are skeptical of cryptocurrencies, arguing that they could lead to financial crime and consumer protection issues. They advocate strict regulation to prevent illegal activities such as money laundering and tax evasion.
Regulatory policies: These politicians push for stricter regulatory policies, requiring cryptocurrency businesses to comply with existing financial regulations.
Cryptocurrency Circle Attitude
Driving innovation: Industry leaders such as Brian Armstrong, CEO of Coinbase, called on the government to formulate friendly policies to support the development of blockchain and cryptocurrency companies and prevent the outflow of talent and capital.
Advocate for education: The crypto community actively promotes education among the public and policymakers to improve their understanding of blockchain technology and cryptocurrencies in order to gain more support.
Oppose excessive regulation
Innovation protection: The crypto community is concerned that excessive regulation will stifle innovation and calls on regulators to consider the particularities and needs of technological development when formulating policies.
Cooperation and dialogue: The crypto community strives to establish dialogue channels with regulators through lobbying and cooperation to seek common solutions. In the United States, there are voices supporting innovation and promoting legislation as well as calls for strengthening supervision in ensuring the development of Web3 technology domestically, reflecting the complexity and diversity of this emerging field.
So, are there any good suggestions and advice?
If the SFC fails to actively embrace innovation and adopt more forward-looking and inclusive regulatory policies in the field of cryptocurrency, Hong Kong's status as an international financial center may be weakened and fall behind in the competition with the United States.
Here are some specific suggestions that the SFC needs to innovate in the cryptocurrency space:
âą Develop a clear and concise regulatory framework for cryptocurrencies: Currently, there is still some uncertainty in Hong Kongâs regulatory framework for cryptocurrencies, which makes it difficult for companies to conduct business and also hinders investors from entering the market. The SFC should formulate clear and concise regulatory rules as soon as possible to provide greater certainty to the market.
âą Explore an approval system for cryptocurrency exchanges: Currently, Hong Kong has not approved any cryptocurrency exchanges. The SFC should consider establishing an approval system for cryptocurrency exchanges and issuing licenses to qualified exchanges, so that investors can trade on compliant platforms.
âą Support innovation in cryptocurrency products: Cryptocurrency technology has great potential to generate a variety of new financial products