The People's Bank of China (central bank) recently released the (China Financial Stability Report (2024)), which focuses on the regulatory dynamics of cryptocurrencies in various countries, and specifically mentions that Hong Kong is 'actively exploring' a cryptocurrency licensing system. This stands in stark contrast to the strict policy of comprehensive prohibition of cryptocurrency trading by Chinese authorities, highlighting the policy divergence between China and Hong Kong regarding cryptocurrency regulation.
The (China Financial Stability Report (2024)) released on December 28 mentions that, given the potential spillover risks of crypto assets to the stability of the financial system, regulatory authorities in various countries are continuously strengthening their regulatory efforts on crypto assets. Currently, 51 jurisdictions worldwide have implemented bans or restrictions on crypto assets, and some economies have adjusted existing laws or re-legislated regulations.
As early as September 2021, the People's Bank of China, along with multiple departments, issued a notice to comprehensively ban cryptocurrency trading and mining activities within the country. In stark contrast, Hong Kong has adopted a markedly different attitude toward the cryptocurrency sector.
Since June 2023, Hong Kong officially launched a licensing system for cryptocurrency trading platforms, allowing licensed platforms to provide trading services for retail investors. The report mentions that Hong Kong currently categorizes crypto assets into 'securitized financial assets' and 'non-securitized financial assets' for regulatory purposes. A distinctive 'dual license' system is implemented for operators of cryptocurrency trading platforms, meaning 'security tokens' are subject to the regulatory and licensing system of the 'Securities and Futures Ordinance'; 'non-security tokens' are subject to the regulatory and licensing system of the 'Anti-Money Laundering Ordinance'. Institutions engaged in virtual asset business must apply for a registered license from the relevant regulatory authorities to operate.
At the same time, the Hong Kong government has also required large financial institutions such as HSBC and Standard Chartered Bank to include cryptocurrency exchanges in their daily customer monitoring scope.
In addition, the People's Bank of China pointed out in the report: 'The correlation between crypto asset activities and systemically important financial institutions, core financial markets, and market infrastructure is limited, but as the application scenarios of crypto assets increase in payments and retail investments, crypto assets may pose risks in certain economies.'
To this end, the Financial Stability Board (FSB) and relevant standard-setting bodies jointly formulated a global regulatory framework for crypto assets, guided by the principle of 'same activity, same risk, same regulation' to help regulators address financial stability risks related to crypto assets.
"The People's Bank of China (Financial Stability Report) mentions global cryptocurrency regulatory dynamics, specifically naming Hong Kong's exploration of a licensing system" was first published on (Blockk客).