China’s central bank spotlights Hong Kong’s crypto licensing system in new report

The People’s Bank of China highlights Hong Kong’s active crypto licenses, as well as the importance of cryptocurrency as an emerging trend in several countries in its recent Financial Stability Report.

In a extract of the 2024 Financial Stability Report, The Chinese central bank is making progress compliance of cryptocurrencies in Hong Kong. The report recognizes how crypto has become a global trend that major countries are quickly adapting to via license and regulation.

“At present, 51 countries and regions around the world have banned crypto assets, and some economies have adjusted their original laws or re-legislated their regulations,” the central bank wrote in a translated text. report.

The Financial Stability Report mentions several major steps taken by the United States, Japan, Singapore, the United Kingdom and the European Union to ensure that the crypto industry has clear guidelines and that traders’ rights cryptography are well protected under national laws.

Hong Kong implements a “dual licensing” system for virtual asset trading platforms and operators, dividing cryptocurrencies into two categories: security tokens and non-security tokens. Security tokens must meet the licensing standards listed in the Securities and Futures Commission regulatory framework, while non-security tokens must follow the Anti-money laundering bill.

Meanwhile, Hong Kong-based financial institutions that wish to provide crypto-related services must apply for a registration license from financial regulators. According to the report, major financial institutions such as the Hongkong and Shanghai Banking Corporation and Standard Chartered Bank are required to include crypto asset trading in their daily scope of operations.

Despite these initiatives, Hong Kong has failed to catch up with Singapore in terms of crypto licensing. Singapore has been praised for speeding up its crypto licensing process, granting licenses to 13 crypto companies in 2024 alone.

Meanwhile, regulatory hurdles continue to stymie Hong Kong regulators, slowing the issuance of licenses for crypto companies in the region. In fact, large exchanges like OKX And Bybit canceled their license applications in Hong Kong without explaining why.

As before reported According to crypto.news on December 24, Hong Kong has distributed licenses to seven platforms, four of which were just approved this month. It is assumed that the slow licensing process in Hong Kong is hampered by China’s influence. Unlike Hong Kong, cryptocurrency trading activities are prohibited in mainland China. To circumvent the ban, traders based in China use a VPN to access exchanges like Bybit from a server abroad.