Hong Kong looks to speed up crypto regulation amid rising sector demands

Hong Kong is exploring ways to accelerate updates to crypto regulations in response to the rapidly growing global industry.

The rapid growth of the crypto sector is forcing Hong Kong to reconsider its regulations, with talks focused on accelerating changes to meet growing industry needs. A proposal tabled in the Legislative Council on December 11 highlights the pressure on the government to keep up with the global surge in crypto investments.

In a written response, Acting Undersecretary of Financial Services and Treasury Joseph Chan admitted that while the virtual assets sector offers opportunities for financial innovation, it also presents “new complexities to the financial system.” He emphasized Hong Kong’s commitment to complying with international standards and noted that the city “has had a significant influence in the regulation and development of VA”.

However, Chan did not go into detail on how and when Hong Kong plans to adjust its crypto regulations to remain competitive.

Moreover, some legislators have even expressed concern about the need for a more comprehensive approach. There is speculation that Hong Kong may set up a special department or commissioner to oversee crypto policies, following international trends.

One way or another, the question of whether cryptocurrencies like Bitcoin (BTC) will be included in Hong Kong’s financial reserves still seems open. Meanwhile, Chan pointed out that crypto assets are not currently a target asset for the Hong Kong Stock Exchange Fund.

“It cannot be excluded that there may have been investments involving crypto assets during the investment operations of outside managers at different points in time, but the relevant proportion is minimal,” Chan said.