Xiao Feng, Wanxiang Blockchain CEO

Before March 1 next year, it is legal to set up a so-called virtual asset exchange in Hong Kong, if only trading BTC, ETH, etc., no one can stop it. In fact, according to the regulator, before March 1 next year, those who apply for a license to the regulator are a kind of voluntary acceptance of regulation. But March 1 next year, with Hong Kong's anti-money laundering regulations revised in the Legislative Council after the passage of the mandatory licensing system management, that is, no matter how, in Hong Kong do engage in any of crypto or virtual asset-related business, not necessarily to open exchanges, is to provide wallet services need to apply for a license, otherwise it can not be done.

How to interpret the new policy in Hong Kong, I think we can interpret it from several levels. The first level is that the head of financial technology of the Hong Kong Securities and Futures Commission, that is, the head of the review of our license mentioned that Hong Kong's one country, two systems, mainland policies are not implemented in Hong Kong, Hong Kong has its own set of policies related to virtual assets. The second level is what Ms. Leung of the Hong Kong Securities and Futures Commission said in her speech today, that Hong Kong is willing to try and open up discussions on the opening up of individual investors. The third level is the policy declaration announced today, that some legislation should be made for smart contracts to consolidate its legitimacy, which is actually helping Web3. to legislate for smart contracts to give it legitimacy, which is actually legislating for DAO to give DAO legitimacy, and DAO may be a basic form of business organization for all our entrepreneurs in web3. If you want to come to Hong Kong to do WEB3 startups, in fact, there have been no legal barriers. It's just that if Token was involved before and Token economics was involved, then Hong Kong's policy or attitude was not clear enough before this, and today this is kind of very clearly expressed that this is not only legal and compliant in Hong Kong, but also welcomed and encouraged by the Hong Kong government. So I don't think there are any obstacles to starting a business in Hong Kong. There is much more compliance, there is much less risk, there can be a set of rules to guide you to tokenization, and the rules of the rule of law environment for starting a business in Hong Kong are clear. I always want to say one thing: anything is possible. But the difficulty is in the details, how to implement is a huge test, we hope to see a step-by-step process of implementation one by one.

SBF，FTX Founder

“What would a world-class cryptocurrency hub look like? I think the Bahamas looks like one of them, Dubai looks like one of them, but if you look to the Eastern, it's less obvious" and "it could be Singapore, it could be somewhere like Busan, South Korea, but I think it could very well end up being Hong Kong," he added. Bankman-Fried cited regulatory uncertainty when moving FTX from Hong Kong to the Bahamas in 2021.

Adrian / Cheng Chi-kong, Executive Vice Chairman and CEO of New World

Adrian said Hong Kong embraces three major opportunities and is expected to become a unique global hub for virtual assets. He believes that the government, financial institutions and investors need to cooperate with each other to bridge the gap between tradFi and DeFi and to further integrate the two. Regarding the government's licensing regime for "virtual asset" service providers, Adrian believes that with the advantage of one country, two systems, Hong Kong is the only place in China that can legally provide virtual asset services, which will lead to new opportunities. He continued, "With the introduction of the HKMA's regulatory regime for virtual assets and stablecoins, and with InvestHK speaking out in support of STO, the industry is believed to benefit. As Hong Kong's IPO capital raising accounts for a significant share of the global securities market, Adrian expects that Hong Kong's STO market will rise to become a world-leading market in the future. Adrian also believes that Hong Kong needs a sound digital financial ecosystem and virtual asset custody system, as well as a near real-time settlement trading arrangement for security tokens; the development of a one-stop platform to integrate different tokens, central bank digital currency (CBDC), etc. will be a golden opportunity for Hong Kong. In addition, the market also needs to break through the current boundaries between DeFi and utility tokens.

Julia / Leung Fung-yee, SFC Deputy Chief Executive

She said she welcomes the development of Hong Kong's fintech community, including NFT, metaverse and Web 3.0, among others; but also reflects the importance of traditional financial regulation in the context of a volatile virtual currency market. The SFC has been actively seeking to establish mechanisms to authorize ETFs to provide exposure to mainstream virtual assets with appropriate investment guardrails. She believes that the initial concerns about virtual asset futures ETFs have become manageable and that the issues can be addressed with appropriate safeguards.

In addition to the existing requirements applicable to ETFs, Julia said virtual asset futures ETFs are subject to additional requirements related to disclosure of their management company's investment strategy and investor education. In the initial phase, the SFC is limiting the underlying assets to bitcoin futures and ethereum (ETH) futures traded on the Chicago Mercantile Exchange (CME). The SFC will provide more information later today.

Currently licensed virtual asset trading platform, with "professional investor participation" restrictions, whether the future will be further relaxed to retail investors to be consulted again, stressed that regulation will be "similar business, similar risk, similar regulation" as the principle.

She pointed out that when the relevant amendments to the anti-money laundering regulations are passed by the Legislative Council, the power to issue licenses and terminate services will be transferred to the new regulations, when the central virtual asset trading platform needs to obtain the relevant license to continue to operate, emphasizing that all involved in assisting customers to invest and trade, need to be included in the scope of regulation. After the draft is passed, the SFC will consult the public on the details of the regulations. Regarding the HKMA's plan to issue tokenized green bonds, Julia said that if the risk is no different from that of ordinary green bonds, it is believed that they need not be regarded as complex products and the public can participate.

Subsequently, the SFC issued a notice that it is prepared to accept applications for authorization of virtual asset futures ETFs, closely monitoring the development of the virtual asset market and its regulatory environment to understand the appropriateness of authorization of ETFs that invest directly in spot virtual assets.

Hong Kong Financial Secretary Policy Statement on the Development of Virtual Assets in Hong Kong.

On October 31, the Financial Secretary (Financial Services and the Treasury Bureau) officially released the "Policy Statement on the Development of Virtual Assets in Hong Kong", which sets out the Government's policy position and approach on the development of a vibrant virtual asset industry and ecosystem in Hong Kong.

While stepping up preparations for a new licensing regime for virtual asset service providers, the Manifesto states that the Government will be pleased to reach out to the global virtual asset industry and invite relevant exchanges to explore business opportunities in Hong Kong. The Securities and Futures Commission will launch a public consultation on the appropriate extent to which retail investors can trade virtual assets under the new licensing regime. The Government welcomes the possibility of introducing virtual asset Exchange Traded Funds (ETFs) in Hong Kong. The Government is open to reviewing the property rights of tokenized assets and the legality of smart contracts in the future to facilitate their development in Hong Kong.

In addition, the government has embarked on three pilot projects, namely the issuance of proof-of-attendance NFTs at Hong Kong Fintech Week 2022; the tokenization of government green bond issues for subscription by institutional investors; and the digital Hong Kong dollar, which can serve as the "backbone" and backbone between legal tender and virtual assets, providing the necessary impetus for more innovation. Confidence.

Learn more:

https://gia.info.gov.hk/general/202210/31/P2022103000455_404825_1_1667173459238.pdf

Follow us

Twitter: https://twitter.com/WuBlockchain

Telegram: https://t.me/wublockchainenglish