On April 7, Hong Kongs Top Finance Secor Watchdog officially approved digital asset trading platforms and exchange traded funds (EFTS) which offers staking services, which is the latest landmark on its roadmap to make the special administrative region a “virtual asset.”
On one statementSecurities and Futures Commission (SFC) announced that it had provided regulation guidance If
Staking for licensed “Virtual Asset Trading Platforms” (VATPS) and Digital Asset ETFS.
“We have noted investors’ demand for intervention services and the potential to put activities to contribute to the Blockchain network’s safety,” the controller said. “SFC recognizes the potential benefits of Staka to improve the safety of blockchain networks and allow investors to earn returns on virtual assets within a regulated market environment.”
SFC clarified that VATPS and Digital assets ETF Interested in providing response services must receive preceding written approval from SFC, and the supervisory authority will introduce specific conditions on license holders, such as the implementation of effective policy to prevent or detect errors and other incorrect activities, reveal associated risks and fees and relevant due diligence.
The controller also prescribed that VATPS must retain control over all media through which the client’s digital assets can be withdrawn from the intervention services and that custody of client digital assets of third -party suppliers is not allowed.
“To broaden the suite with regulated services and products is crucial to maintaining the healthy development of Hong Kong’s virtual asset ecosystem,” says Julia Leung, SFC’s CEO. “But the widening must be done in a regulated environment where the safety of the client’s virtual assets continues to be the front and the center of compliance frame to offer such a service.”
SFC noted that the new guidelines are part of its Road planwas announced in February this year, as part of Hong Kong’s government initiative to make the territory a digital asset hub.
Digital asset hub
SFC described twelve major initiatives to improve safety, innovation and growth of Hong Kong’s digital access
Market under a five-pile roadmap called “Strive” – Accessibility, safeguard measures, products, infrastructure and relationships.
Among the twelve initiatives was to establish license regimes for trade and custody services; attracts global platforms and liquidity suppliers; Explore a regulatory framework for professional investor-exclusive new token lists and digital asset trading; Modernization of reporting, monitoring and collaboration between agencies; and “Consider allowing to rise and borrow/lending services under clear custody and operational guidelines.”
The latter of these, from Monday, has now developed SFC.
Hong Kong openly signaled his intention to become a digital asset hub in January 2023, when the region’s financial secretary Paul Chan mentioned That – during politics to “grab companies” and “grab talent” – the government actively reduced the tax burden for fintech and digital asset companies that are interested in setting up stores in Hong Kong.
A few months later, in March of that year, SFC published their proposed rules For digital asset trading platforms, including allowing retail investors to access locally licensed exchange.
Since then, various other measures have shown that Hong Kong’s embrace of the digital asset space, including, in March 2024, becomes the first region Beyond the mainland China to support Digital Yuan Centralbank Digital Currency (CBDC) and in December last year introduction of its long-awaited Stablecoin bill.
All this led to SFC officially announcing its roadmap and twelve initiatives in February.
“Following the core principles for investors’ protection, sustainable liquidity and adaptive regulation, the roadmap itself is a calibrated response to growth VA (virtual assets) market challenges, thereby helping our ecosystem future,” said Dr. Eric Yip, SFC’s CEO of the intermediaries, at the time.
He added, “The roadmap is not a final destination but a living plan, one that invites collective efforts to promote Hong Kong’s vision as a global hub where innovation thrives within the protective railings.”
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