Regulation NewsWorld News

Possibility of banning digital currency transactions in Hong Kong; Exchanges warn of underground activity

The possible introduction of a plan to ban micro-investors from engaging in digital currency activities in Hong Kong has raised concerns in the industry. In this regard, some digital currency activists in this country have warned about the undergrounding of activities.

to the the report Coin Telegraph, a digital currency industry activist in Hong Kong, is trying to delay the passage of an ongoing digital currency law. The bill restricts legal transactions in digital currencies to professional investors only; As 93% of the population of this region is deprived of this market.

The crypto industry union, Global Digital Finance, warned the China Morning Post on Monday that the bill would encourage retail traders to turn to off-regulatory platforms.

GDF represents digital currency exchanges such as BitMEX, Houbi, Coinbase and OKCoin. This institution is at the forefront of the industry’s efforts to counter the bill.

The Hong Kong Treasury and Treasury Service first introduced the plan in November 2020 as part of efforts to step up counter-money laundering and terrorist financing efforts. The bill is also in line with Hong Kong’s efforts to bring domestic regulations into line with the recommendations of the Financial Action Task Force (FATF).

But the regulator’s design goes beyond the requirements of the FATF framework and further reflects the Chinese government’s tough stance on digital currency transactions. Malcolm Wright, chairman of the GDF Advisory Council, noted that FATF members such as Singapore, the United Kingdom and the United States all allow small traders to participate in the digital currency market.

The Hong Kong government has been consulting with the public and union members since January. Now that the consultation period is over, the proposal is expected to become a bill and be tabled in the Hong Kong Legislative Council this year.

The China Morning Post estimates that 93 percent of Hong Kong’s population will be affected by the ban. This estimate is based on a recent study by CitiBank, which found that only 7% of Hong Kong people, or 504,000 people, have sufficient assets to meet the criteria set for professional investors.

A representative of the Hong Kong Bitcoin Association recently argued that depriving micro-investors of access to Bitcoin would violate the government’s goals of promoting innovation and financial inclusion. The proposed restrictions may also be extended to Bitcoin ATMs. It will also significantly expand the power of the Hong Kong legislature in licensing digital currencies to businesses.


Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button