Hong Kong’s Securities and Futures Commission (SFC) is investigating legislation governing virtual currency transactions, including whether people can participate in exchange-traded funds, or ETFs.
According to a report published on November 3 by the South China Morning News, the 2018 legislation restricted cryptocurrency transactions through funds or trading platforms to professional investors with a minimum investment of HK$8 million.
The re-evaluation will take place “to assess if it is still suitable for purpose and whether any revisions are necessary”, according to SFC deputy chief executive Julia Leung Fung-yee. “Virtual assets are moving into traditional finance”, according to Fung-yee, who spoke at the 2021 Hong Kong Financial Technology Week conference.
“There are more varied forms of virtual asset investment instruments accessible. And traditional exchanges in other countries are now offering crypto ETFs.”
Digital assets surged in popularity since the SFC adopted these laws
Even though these financial products maybe purchased from other nations, Hong Kong-based investors are unable to purchase crypto ETFs. At least 12 applications for these funds have been filed with the Securities and Exchange Commission (SEC) in the US. With the goal of allowing speculators to participate in the cryptocurrency market. Companies interested in providing such investments have made many enquiries to the Hong Kong authorities.
Digital assets have surged in popularity dramatically since the SFC adopted these laws three years ago. With Bitcoin (BTC) surging six-fold to $62,238 this week. Big investors and institutions rushed into cryptocurrencies in the hopes of seeing them utilised in payments shortly. While individual investors jumped in for a fast profit.
After the review, SFC, de facto central bank, and Hong Kong Monetary Authority are working together. In order to issue a single circular. The SFC and the HKMA will apply the principle of “same business, same risks. As well as “similar standards” to banks, brokers, and digital platforms engaged in digital currency asset-related operations, according to Fung-yee.