Hong Kong is set to release its cryptocurrency exchange licensing framework in May 2023, according to the chief executive of Hong Kong’s Securities and Futures Commission (SFC), Julia Leung. The licensing guidelines will require every digital asset service provider and operator to seek and acquire approval from the regulator. Companies seeking to offer services in Hong Kong will need to apply for and obtain licenses from the commission. The regulation framework follows a vital consultative process that started after a policy statement from the government in October last year that highlighted the need to regulate virtual assets, including sectors such as DeFi and NFTs. The SFC reportedly received over 150 responses from various players during the consultative process.
Hong Kong has taken an aggressive approach to crypto regulation recently as it seeks to make itself a leading crypto-friendly jurisdiction. Recent administrative policies have indeed seen the number of companies looking to operate from the city-state jump to near 100. Other than cryptocurrency exchanges, there are multiple projects and platforms in Web3 security, blockchain payments, and infrastructure that are currently eyeing SFC’s licensing.
The European Union parliament recently voted to approve the Markets in Crypto Act, MiCA regulation, which has been hailed as key to regulatory clarity for the crypto industry in the EU. The law is expected to take effect in 2024 and is expected to herald a new era for crypto.