**Hong Kong's Crypto Regulation: A Balancing Act**

Hong Kong-based First Digital Trust is urging the city to speed up its regulation of digital assets to keep pace with the rapidly evolving industry. Currently, only two virtual asset trading platforms, Hash Blockchain and OSL Digital Securities, are fully licensed in Hong Kong, with many others awaiting approval.

Vincent Chok, CEO of First Digital, acknowledges the conservative approach to protect investors but stresses the need for quicker regulatory action. Since June 1, operating an unlicensed virtual asset trading platform in Hong Kong is a criminal offense, and the Securities and Futures Commission has listed suspicious or unlicensed entities targeting local investors.

Chok also notes that Hong Kong isn't ready to regulate USD-backed stablecoins, unlike Dubai, which has a more global approach. He looks forward to future regulations in this area.

Despite the slow licensing process, Hong Kong is making strides in Web3 integration, including central bank digital currencies (CBDCs) and tokenization of real-world assets. Initiatives like the HKMA’s Project Ensemble sandbox are exploring tokenized asset settlements and interbank transactions using a wholesale CBDC.

While banks are hesitant to offer crypto custody services due to liability concerns, established trust structures are stepping in to fill the gap. Meanwhile, the UAE has allowed Standard Chartered to offer crypto custody services, starting with Bitcoin and Ether.