By
Chimamanda U. Martha
April 16th, 2024
Beijing officials are getting behind a Hong Kong agenda to transform into a crypto hub in the Greater China region.
Hong Kong has reportedly secured quiet backing from Beijing to become a global crypto hub. China Liaison Office representatives and other government officials have frequently visited the city’s crypto gatherings for months to further the cause. Inside sources have stated that these encounters are friendly and cordial, with participants checking on developments and exchanging business cards. Furthermore, Beijing’s support for the emerging Hong Kong crypto hub is also allegedly evidenced in project report requests and follow-up calls.
People familiar with the matter believe the subtle Chinese backing could incentivize mainland Chinese firms to return. Furthermore, local crypto operators opine that the presence of government officials at crypto gatherings confirms Beijing’s support. In fact, observers suggest that the support from mainland China is intentional and has an end goal. By low-key supporting the crypto hub agenda of the more liberal Hong Kong, Beijing can ascertain the impact of digital currencies. In addition, the state capital could treat Hong Kong as a testing ground even as it stifles similar activity in mainland China.
National People’s Congress member and cyber security lawyer Nick Chan seemingly reiterated Beijing’s support:
“As long as one does not violate the bottom line… not threaten financial stability in China, Hong Kong is free to explore its own pursuit under ‘one country, two systems.”
Beijing-backed Hong Kong Crypto Hub Agenda Could Entice Return of Chinese Crypto Firms
This development could also see mainland Chinese crypto players return to Chinese territory following the Beijing crypto ban. Fifteen months ago, many of these crypto firms fled overseas after China’s capital city shuttered crypto activities. However, although any crypto firm return could be to Hong Kong, the Greater China region would still boast of crypto-friendly activities.
Hong Kong recently released a consultation paper outlining its crypto plans to facilitate trading large crypto coins. According to the Hong Kong Securities and Futures Commission (SFC), individual investors would trade larger coins on licensed exchanges. Although the regulator also prescribed safeguards to protect investors, it did not specify the large-capitalization tokens permissible for investor trading. However, the SFC noted that the consultation period concludes on March 31st, making way for new crypto retail trading on June 1st.
Justin Sun Comments on Hong Kong Development amid Huobi Licensing Application
East Asian crypto industry leader Justin Sun recently commented on the Hong Kong development. In an interview last month, Sun pointed out:
“The changing attitude of the Hong Kong SAR government towards crypto signals a nod from the Chinese central government granting pilot status to HK for some forward-looking experiments on how can crypto be best adopted and localized for the huge Chinese market at large. I’m very bullish on the outlook for crypto in the greater China region for the next decade.”
Sun’s comments also came amid an announcement that Huobi had applied for crypto licensing in Hong Kong. The Seychelles-based crypto exchange targets high-net-worth investor trading in the Chinese special administrative city.
