China purportedly supports Hong Kong’s goal of becoming a crypto powerhouse, according to a recent Bloomberg story. According to the article, representatives from China’s Liaison Office routinely attend cryptocurrency events in Hong Kong.
This report indicates that interactions between Liaison Office members have been positive. Sources also claim that authorities have also requested reports, followed up with people in certain instances, and checked on progress. Also, this was done to make it possible for regular investors to trade cryptocurrencies like Bitcoin and Ethereum.
But only authorized government-licensed exchangers will be able to accomplish it. Exchanges must be aware of exposure limitations, risk profiles, and other factors since protecting investors are one of the SFC’s top concerns.
SFC to allow regular trading
The Securities and Futures Commission (SFC) of Hong Kong is still dedicated to becoming a center for cryptocurrencies, and its plan to allow regular trading is a major development.
It’s vital to keep in mind that in 2021, China asked for a ban on cryptocurrency trading. Smaller easings in the development of blockchain technology and NFTs have recently been reported.
The SFC recommends a number of conditions, including the development of a risk profile for clients. This will help to guarantee that the level of risk they are exposed to is “appropriate,” as well as the implementation of a due diligence procedure on tokens prior to their listing. Hence, this would ensure that only pre-approved tokens are made available to traders.
Beijing is unwilling to relax the crypto prohibition
At the same time, rumors indicated that Beijing is unwilling to relax the prohibition. It’s possible that this is due to worries over consumer safety, money laundering, and the effect that Bitcoin mining has on the environment.
The stability of China’s economy, on the other hand, should not be in jeopardy, according to the opinions of financial experts, so long as core principles do not violate the laws. They said that Hong Kong is free to pursue its interests within the “One Country, Two Systems” framework.
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