Hong Kong authorities expect to license more crypto exchanges before the end of this year, according to Finance Minister Paul Chan.
During the ongoing Hong Kong FinTech Week, Chan stated that the Securities and Futures Commission (SFC) is actively investigating more platforms for possible licensing. The news indicates that more virtual asset service providers could receive licenses, joining recent licensees such as OSL Exchange, Hashkey Exchange and HKVAX.
He stated:
“So far we have issued three permits. Meanwhile, the SFC (Securities and Futures Commission) assesses the compliance with laws and regulations by the so-called service providers. We expect more licenses to be issued in the coming months.”
Chan also highlighted further ongoing regulatory efforts, including plans to regulate stablecoins and establish guidelines for over-the-counter (OTC) trading. He added:
“The HKMA already launched a stablecoin issuer sandbox in March to enable interested parties to conduct testing and facilitate two-way communication on the proposed regulatory requirements, to ensure that such requirements are fit for purpose. Our plan is to introduce the legislation this year.”
Furthermore, Chan pointed out that the Hong Kong government not only wanted to reap the benefits of AI, but also “address the potential challenges such as cybersecurity, data privacy, the protection of intellectual property rights, and concerns about its impact on jobs and ethics.”
The Government will therefore launch a policy statement that reflects its policy position and regulatory approach to the responsible application of AI in financial services.
Tax incentives
Meanwhile, Hong Kong is also exploring new tax incentives that could extend current pauses for traditional funds and family offices to crypto investments.
Christopher Hui, Minister of Financial Services and Ministry of Finance, shared this update during Hong Kong FinTech Week, noting that tax breaks for crypto and other investments could be implemented by the end of the year.
Hui believes these incentives will boost investment and accelerate growth in the sector.