China has been very reluctant towards cryptocurrencies for a few years. However, Hong Kong, which has a very specific status in China, has decided to revise its requirements regarding digital currency trading to attract investors from all over the world.
A mass exodus of crypto professionals weighed in on Hong Kong’s decision
Following a massive exodus of companies specializing in virtual currencies, Hong Kong has decided to reconsider its support for Chinese cryptocurrency policy (see also cryptocurrency in china called the digital yuan).
Indeed, Hong Kong wants to attract cryptocurrency professionals again to resume their various activities in the city state; especially with regard to the development of the crypto market in the Pacific.
If Hong Kong has decided to review its position, it is because it alone constitutes an important financial market in Asia. A market that has always enjoyed great autonomy compared to other major Chinese cities and a particular attraction compared to other Asian countries.
Thus, through this decision, Hong Kong wants to differentiate itself from Chinese policy without calling into question all the restrictions on cryptocurrency exchanges. Indeed, the restrictions put in place by China will remain.
However, Hong Kong, which benefits from a special status, wishes to roll out the red carpet for cryptocurrency exchanges and professionals in the sector so that they can operate legally on its territory. The goal is to keep hold of the Asian crypto financial industry.
Awareness to correct past mistakes
The virtual currency sector is becoming more and more compliant and it is time to think about regulations to further clean it up. This is what Hong Kong has understood by dissociating itself from China’s formal ban on economic activities related to cryptos.
By taking this decision, Hong Kong has admitted its awareness while acknowledging the shortfall caused by the exodus of companies specializing in cryptocurrency. For Hong Kong, the time has come for the talents in this field that have been exported to other lands to be repatriated.
However, there is still a big hurdle to overcome since the Chinese authorities can always repudiate the Hong Kong position. However, the regulator in Hong Kong assures that the city state will do what is necessary to allow the crypto industry to develop on its territory and in Asia.
Moreover, the legislation could evolve to allow companies as well as individuals to invest more easily in the crypto market.
In summary, Hong Kong has shown its willingness to lift certain restrictions on cryptocurrencies. But nothing is certain yet, because everything depends on the Chinese reaction and the backlash from China could end up curbing Hong Kong’s ambitions.