Hong Kong’s Crypto Push Could Have China’s Backing: Reports

Is China experimenting with crypto in its backyard – Hong Kong? Over the last few months, the city has made some decisive moves to have a clear regulatory environment for crypto businesses in its jurisdiction. Hong Kong is the special administrative region of China with a separate legal system and control over its markets.

As per local government officials, the city may start crypto trading for retail investors in June. This represents a sharp contrast to the ban on crypto trading and mining by China within its jurisdiction, implemented in 2021.   

China’s Support of HK’s Crypto Ambitions 

However, a new narrative to China’s ban on crypto activities is available now. According to a Bloomberg report, Hong Kong’s push to legal crypto trading may have quiet backing from China.

The city, which has been a global financial and trade hub, began inviting crypto businesses in October. Many such firms that are now setting up their businesses in Hong Kong are those that had to wrap up their operations in mainland China after the ban.

The coverage says officials of China’s liaison office in Hong Kong are increasingly being seen at crypto business events and meetings in Hong Kong. Interestingly, these officials don’t frown upon Hong Kong’s push to become a global crypto hub.

Rather, they are seen exchanging reports and business cards, and making follow-up calls, suggesting “low-key support” to the city’s initiatives in the crypto sphere.

China’s ban on crypto trading and mining in 2021 forced some of the most reputed crypto businesses including Binance and Tron out of the country.  

“The changing attitude of the Hong Kong SAR government towards crypto indicates that the Chinese central government has granted pilot status to HK to see how crypto can be best adopted and localized for the Chinese market at large… I am very optimistic on the outlook for crypto in the Greater China region for the next decade,” Tron founder Justin Sun said last month in an interview with Bloomberg TV.

HK’s Rapid Stride towards Crypto Hub

On Monday, the Securities and Futures Commission of Hong Kong released a consultation paper that outlined plans to allow retail investors to trade in mega coins such as bitcoin and ether on licensed crypto exchanges.  

Last month, SCF said it would publish a list of highly liquid tokens that retail investors can trade in, alluding that such market participants will not be allowed to buy or sell risky digital assets. Early this month, US-based Interactive Brokers launched BTC and ETH trading services for professional investors on its platform alongside other asset classes.