At the intersection of financial innovation and regulatory policy, the President of the Hong Kong Securities and Futures Professionals Association, Chen Zhihua, recently proposed a series of recommendations for the development of Hong Kong's virtual asset market. These recommendations aim to revitalize and expand Hong Kong's virtual asset market by easing restrictions on participation for mainland residents. Here is a detailed analysis of these six key recommendations:

1. Ease restrictions on participation for mainland residents
Chen Zhihua emphasized that easing restrictions on mainland residents' participation in the virtual asset market will be an important step in activating market vitality. Currently, Hong Kong's virtual asset market has certain thresholds for participation from mainland residents, which not only limits potential capital inflow but also hinders the exchange of technology and innovative ideas. Easing these restrictions is expected to attract more mainland investors, increase market liquidity and capital volume, thereby enhancing Hong Kong's position and influence in the global virtual asset market.

2. Improve the regulatory framework
The rapid development of the virtual asset industry requires that the regulatory framework must also keep pace with the times. Chen Zhihua suggested that it is necessary to assess and adjust the existing regulatory system to make it more suitable for the characteristics of virtual assets. This may mean that regulatory agencies need to adopt more flexible and innovative approaches to regulation while maintaining risk control. This includes reducing unnecessary compliance burdens and providing clearer guidelines and standards.

3. Simplify the licensing process
Currently, the approval process for virtual asset platform licenses in Hong Kong is considered cumbersome and slow. Chen Zhihua suggested optimizing this process by introducing electronic application systems and increasing the number of approval personnel, among other measures, to accelerate the approval speed and provide a clear timeline and more transparent processes. This will help attract more international participants and enhance the market's international competitiveness.

4. Establish a unified regulatory body
Considering that virtual assets span multiple regulatory areas, Chen Zhihua proposed establishing a dedicated virtual asset regulatory committee responsible for coordinating the work of different agencies, ensuring consistency and efficiency in regulation, which can reduce compliance costs for businesses while improving regulatory efficiency.

5. Strengthen cooperation with the mainland
The special administrative region government needs to strengthen cooperation with mainland regulatory agencies to explore mechanisms for mutual connectivity in the virtual asset field between the two markets. This cross-border cooperation can not only facilitate the two-way flow of funds but also provide more opportunities and a larger market for investors in both regions.

6. Introduce more expertise and industry experience
Chen Zhihua suggested introducing more expertise and industry experience in the regulatory process, such as by hiring industry experts to participate in regulatory work, ensuring the scientific and forward-looking nature of regulatory decisions. Additionally, he mentioned that more new products should be developed, such as virtual asset forms of real-world assets (RWA), to adapt to new market demands and technological developments.

Chen Zhihua's recommendations aim to maintain Hong Kong's leading position in the virtual asset field through policy adjustments and regulatory innovations, while attracting more global participants and further consolidating its status as an international financial center. The implementation of these recommendations will require the joint efforts of the government, regulatory agencies, and the industry to ensure the continued development and prosperity of Hong Kong's virtual asset market.