Hong Kong efficiently launched its Virtual Asset Service Provider (VASP) licensing regime this month. Now, the territory is trying to the following stage in its efforts to change into a world crypto hub.
Two areas the place Hong Kong is transferring forward at tempo embrace stablecoin regulation and the event of tokenized securities.
VASP Framework Launched to Cheers From Crypto Sector
Hong Kong’s VASP licensing framework got here into impact in May. And crypto exchanges that need to function within the metropolis have begun making use of for registration underneath the brand new regime.
Leading the pack, Huobi turned one of many first main exchanges to announce that it has utilized for a VASP license. Gate.io has additionally utilized, whereas Bitget, ByBit, and OKX have all said their intention to take action.  Â
Despite being stricter than related frameworks elsewhere, exchanges have welcomed the brand new VASP laws.
OKX Managing Director of Global Institutional, Lennix Lai, mentioned the agency sees “immense potential” in Hong Kong. He added that the brand new VASP regime has created a “robust regulatory framework and the right conditions for Hong Kong to become a world-leading virtual asset hub.”
With crypto companies embracing the brand new licensing system, Hong Kong has already attracted a brand new Huobi headquarters. And as Justin Sun remarked in an interview not too long ago, the trade expects to be absolutely licensed and operational within the metropolis inside six to 12 months.
As effectively as being well-received by crypto companies, the VASP regulation may assist drive additional funding into Hong Kong’s crypto sector.Â
In April, the HKMA even issued tips prompting banks to assist digital asset service suppliers. More not too long ago, the regulator reportedly inspired lenders to fulfill the wants of crypto companies, emphasizing the necessity for due diligence procedures to not create an “undue burden.”
Hong Kong Monetary Authority Eyes Stablecoin Regulation
Building on the success of the VASP regime, the Hong Kong Monetary Authority (HKMA) now plans to determine a regulatory framework for stablecoins.
As reported by the native press this week, the HKMA has launched a public session to discover new potentialities for stablecoin regulation. The session course of will draw opinions from academia, crypto companies, and most people till Q3 of 2023.
According to the official, Joseph Chan Ho-Lim, the authority hopes to determine new laws by the tip of the yr.
Chinese Banks Embrace Tokenized Securities
Another space the place Hong Kong is rising as a pacesetter within the discipline is within the tokenization of securities. And blockchain-based securities have gained traction with each public and non-public sector issuers.
For instance, earlier this yr, the Hong Kong authorities turned the primary on this planet to challenge tokenized inexperienced bonds. The $800 million HKD of bonds had been issued utilizing Goldman Sachs’ tokenization platform — GS DAP.
More not too long ago, this month, the Bank of China turned the primary mainland financial institution to challenge tokenized securities in Hong Kong. In partnership with UBS, the financial institution issued 200 million yuan value of digital structured notes. These took the type of tokens on the Ethereum blockchain.
According to UBS, the issuance was the primary within the area to deploy a public blockchain for such functions.Â
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