Hong Kong can now give approval to licence crypto business

Hong Kong can now give approval to licence crypto business

By Benson Toti - min read

Hong Kong’s first ever license to a cryptocurrency firm will go to OSL Digital Securities

Hong Kong will soon be issuing its first ever license to a cryptocurrency firm.

OSL Digital Securities, a unit within the BC Group, revealed that the country’s securities regulator already agreed in principle to issue a license.

This is under new regulations that allow crypto exchanges to opt into being regulated. So far, no other firm has received this kind of regulatory approval.

Hugh Madden, the Chief Executive of BC Group, stated that the licence would help increase the ease of doing business in the area because they would be able to engage with other regulated entities.

The filing added that final approval is still subject to certain conditions, and did not provide further details.

In related news, Hong Kong will soon be part of China’s trial on the digital yuan. While a comprehensive outline of future plans have not yet been released, this is the most significant expansion of a prototype of cash that will be based entirely online.

The digital yuan’s success in Hong Kong, which is a laissez-faire economy anchored to the US dollar, will be one of the most crucial tests for China’s preparedness to assert itself over global finance.

The digital yuan is currently being tested in four urban areas: the Xiongan New Area in the Hebei region, Shenzhen in Guangdong territory, Suzhou in the Jiangsu region, and Chengdu in the Sichuan region. It is likely going to be trialed in the 2022 Winter Olympics games in Beijing as well.

Yi Gang, Governor of the People’s Bank of China, explained that the implementation of the digital yuan will be important to providing a viable alternative for cash in a digital economy:

“The rollout of central bank digital currency is conducive to efficiently satisfying people’s demands for legal tender under the digital economy, to improving the convenience, security and anti-counterfeiting level of retail payment, as well as accelerating the development of the country’s digital economy,” he stated.

Other financial centers around Asia are also looking at the possibility of regulating cryptocurrency firms. Singapore is currently developing a framework for licensing digital asset forms, while Japan’s Financial Services Agency has already licensed a handful of crypto exchanges.

Central bank digital currencies (CBDCs) are also a hot topic around the world, with many countries looking into the possible development and implementation of their own counterparts.