By Michael Scott
Recent media reports reveal that China’s Liaison Office’s executives have recently sustained regular attendance at various crypto events held in Hong Kong.
Beijing’s Subtle Endorsement
A report published by Bloomberg revealed that the Beijing mainland government offers a subtle endorsement of Hong Kong’s preparedness to undertake the consultation initiative to facilitate the legalization of retail crypto trading.
Bloomberg revealed that some executives drawn from the Liaison Office in the mainland are frequent guests at various crypto gatherings held in Hong Kong. Besides the regular frequency, the executives portray an inquisitive tone coupled with friendly follow-up calls concerning specific projects.
Applying One Country Two Systems Concept
Many stakeholders believe these occurrences endorse Hong Kong’s quest to transform the city into a global crypto hub. Further, the stakeholders allege the Special Administrative Region also intends to utilize its distinct legal structure as a testing platform. The initiative would mirror the 20th-century initiative when Hong Kong became the mainland’s initial open market test.
The Bloomberg report cited Nich Chan’s claims that provided that an individual does not interrupt the bottom line or become a threat to the nation’s financial stability, they are permitted to explore the initiative.
Besides, the National People’s Congress member and procrypto lawyer dismissed any wrongdoing by indicating that the presence of Beijing executives in Hong Kong portrays the application of the One Country Two Systems’ concept.
Licensing Requirements for Retail Crypto Trading
The initial push to initiate retail crypto trading by the Securities and Futures Commission (SFC) took place on February 20. It started via talks concerning licensing the Virtual Asset Service Providers (VASPs) to offer trading services.
Examples of the proposed prerequisites include proper token assessment before listing to ensure the availability of pre-approved tokens to traders and creating a risk profile to promote and guarantee ‘reasonable’ exposure.
Importance of Lengthy Consultation Initiative
So far, the lengthy consultation process finalized by the SFC will play a significant role in allowing exchanges to provide services to professional investors on June 1. In this case, this category includes persons whose net worth exceeds $1 million.
There are still doubts concerning when the Securities and Futures Commission will conclude the consultation process involving permitting access to retail investors.