Hong Kong authorities expect to license more crypto exchanges before the end of this year, according to Financial Secretary Paul Chan.
At the ongoing Hong Kong FinTech Week, Chan stated that the Securities and Futures Commission (SFC) is actively reviewing more platforms for potential licensing. The news indicates that more virtual asset service providers could receive licenses, joining recent licensees like OSL Exchange, Hashkey Exchange, and HKVAX.
He stated:
“We have issued three licenses so far. Meanwhile, the SFC (Securities and Futures Commission) is assessing the legal and regulatory compliance of those deemed service providers. We expect more licences will be issued in the next couple of months.”
Chan also highlighted further regulatory efforts underway, including plans to regulate stablecoins and establish guidelines for over-the-counter (OTC) trading. He added:
“The HKMA has already launched a stablecoin issuer sandbox in March to allow interested parties to conduct testing and to facilitate two-way communication on the proposed regulatory requirements, ensuring that such requirements are fit for purpose. It is our plan to introduce the legislation this year.”
Further, Chan pointed out that the Hong Kong government was not solely looking to reap the benefits of AI but also seeking to “address the potential challenges, such as cybersecurity, data privacy, the protection of intellectual property rights, and concerns about its impact on jobs and ethics.”
Due to this, the government will launch a policy statement that reflects its policy stance and regulatory approach to the responsible application of AI in financial services.
Tax incentives
Meanwhile, Hong Kong is also exploring new tax incentives that could extend current breaks for traditional funds and family offices to crypto investments.
Christopher Hui, Secretary for Financial Services and the Treasury shared this update during Hong Kong FinTech Week, noting that tax concessions for crypto and other investments could be implemented by year-end.
Hui believes these incentives will stimulate investment and accelerate growth in the sector.