The Hong Kong government is accelerating cryptocurrency product approval processes following the high-profile rugpull JPEX’s US$80 million Singapore-based crypto exchange OSL Compliance.
The move has been welcomed by the cryptocurrency industry as it provides greater clarity and regulatory certainty to firms looking to operate in the region.
The Financial Services and the Treasury Bureau (FSTB) is now providing a streamlined regulatory approval process which aims to help Hong Kong-based fintech and cryptocurrency firms setup operations more quickly and easier. This streamlined process is part of the government’s broader effort to build a solid foundation for fintech development in the region.
The new process makes it easier to conduct token sales, launch crypto exchanges, and offers an expedited process for cryptocurrency firms to become regulated money services businesses.
The government is also encouraging banks and other traditional financial institutions to adopt virtual banking licenses in order to become cryptocurrency friendly and provide more financial services for the digital asset industry.
With the new regulations and transparency provided by the revised cryptocurrency product approval and fintech regulations, it is likely that more crypto exchanges, wallets and firms will be interested in setting up operations in Hong Kong.
The new measures are in stark contrast to the situation in Singapore and other major markets such as the United States where cryptocurrency firms face an uncertain regulatory environment and prolonged waiting times to become registered money services businesses.