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Hong Kong on Monday dropped a regulatory bombshell that could change the global digital asset landscape, announcing major changes to ease restrictions on virtual asset platforms and launching a pilot tokenization scheme that puts the city in competition with Singapore and the United States for fintech dominance.
The Securities and Futures Commission will allow locally licensed virtual asset trading platforms to share global order books with overseas affiliates, removing requirements that have forced platforms to segregate their order books within Hong Kong, the SFC’s chief executive said. Julia Leungwrites Reuters.
For investors watching how cryptocurrency regulation unfolds around the world, it’s not just an administrative chore – Hong Kong is signaling it wants a seat at the table as digital assets go mainstream.
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The rule changes will allow virtual asset trading platforms to take advantage of global liquidity and allow professional investors to distribute virtual assets and Hong Kong-regulated stablecoins with less than 12 months of experience, Reuters reported. Previously, platforms had to have at least one year of experience before offering these products.
Why is this important? Because liquidity is the lifeblood of any trading market. By allowing platforms to join global order books, Hong Kong is essentially saying to crypto exchanges: you no longer have to choose between our market and others.
The regulatory adjustments come as Hong Kong steps up efforts to compete with Singapore and the United States amid growing appetite for digital investment, according to Reuters.
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In addition to cryptocurrency trading regulations, Hong Kong’s monetary authority unveiled its Fintech 2030 roadmap on Monday, which focuses on tokenization. CEO Eddie Yue said the regulator will enhance its sandbox ensemble to enable real-value transactions in token deposits and digital assets, starting with tokenized money market funds.
Total spending on digital transformation is expected to reach HK$100 billion ($12.9 billion) a year over the next three years, Reuters reported.