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Given the interest of multiple enterprises in expanding their operations in the region, the new policies will drive interest in Hong Kong as a financial hub.
The Hong Kong Government has announced its plan to issue tokenized green bonds by the end of the year. The information was contained in the body’s policy statement on the development of virtual assets in Hong Kong.
Barring any future changes to the plan, the green bonds could very well be the world’s first tokenized green bonds. Financial Secretary, Paul Chan Mo-Po Chan, believes that embracing technological innovation will strengthen the economic development of the nation.
Chan has previously shared plans to leverage the potential of innovative technology to improve the economy. As a cautionary measure, he said:
“We also need to be careful to guard against market volatility and potential risks they may cause, so as to prevent transmission of the risks and impacts to the real economy.”
Beyond Tokenized Green Bonds
Asides from the tokenized green bonds, the financial secretary also revealed several pilot programs based on its new policy stance.
As part of the new policy, the regulatory body plans to legalize crypto trading. Also, the body will authorize exchange-traded funds with virtual assets. Additionally, Bloomberg reported that the Hong Kong government was planning a compulsory licensing program for crypto platforms.
Again, regulators may begin listing bigger tokens without endorsing specific assets. The Financial authority also announced an update to its consultations on regulating stablecoins.
Given the interest of multiple enterprises in expanding their operations in the region, the new policies will drive interest in Hong Kong as a financial hub. According to Chan, local industrial firms are also in support of the new policy.
FTX Crash Prompting Stronger Regulations
Meanwhile, there are suggestions the recent collapse of FTX may be spurring the new regulatory focus. Recall that FTX filed for chapter 11 bankruptcy after suffering a liquidity crunch that left the market reeling. CEO Sam Bankman-Fried also resigned from his position.
According to Julian Hosp, co-founder and CEO of Cake DeFi, “this will be used as a cornerstone to spark new crypto regulations, which is good for the healthy development of the industry”. Similarly, the Co-founder of Animoca Brands, Yat Siu, believes the new regulations will help correct what has gone wrong in the past.