Hong Kong To Explore Legalization of Retail Crypto Trades in Reversal of Previous Proposal

Hong Kong has proposed allowing retail investors to trade in cryptocurrencies and crypto exchange-traded funds and plans to conduct pilots in NFT issuance and CBDC as it looks to regain its status as a global financial hub.

The city had last year proposed limiting crypto trade to professional investors, a move that saw many crypto entrepreneurs shift base to friendlier jurisdictions such as Dubai and Singapore. Hong Kong will review property rights for tokenized assets and explore legalizing smart contracts “to provide a solid legal foundation for their development,” it said. It is also planning to put in place “appropriate regulations” on aspects such as “governance, stabilization and redemption mechanism” of stablecoin. The proposal comes at a time when China has ramped up its efforts to crackdown on crypto transactions and Singapore is exploring a series of stringent guidelines surrounding virtual digital assets.