Changpeng Zhao’s Insights on Hong Kong’s Crypto Landscape
Changpeng Zhao, known in the crypto world as CZ and the founder of Binance, has advised that Hong Kong should expand its selection of cryptocurrencies available on licensed exchanges to maintain competitiveness with leading financial centers like the United States and the United Arab Emirates. Speaking to the South China Morning Post, Zhao expressed confidence in Hong Kong’s commitment to embracing Web3 technologies, commending the local government for its proactive measures in the fast-evolving sector.
Current Trading Limitations
Currently, retail investors in Hong Kong have the option to trade only four types of cryptocurrencies—Bitcoin, Ether, Avalanche, and Chainlink—on regulated platforms. This restrictive framework was implemented in August 2023 by the Securities and Futures Commission (SFC) when the city legalized retail crypto trading. According to the regulations, only tokens that appear in at least two major investment indices, one from an independent traditional finance provider, can be traded. Zhao criticized these limitations, asserting that the offerings are insufficient and suggested looking to Japan’s more flexible exchange regulations for inspiration, where platforms have more discretion over their listings.
Binance’s Regulatory Position
Though Hong Kong is home to eleven licensed virtual asset trading platforms, Binance, under Zhao’s previous direction, has yet to seek regulatory approval there. After stepping down as CEO of Binance late last year, as part of a settlement with US authorities, Zhao remains engaged with regulatory bodies worldwide and continues to support the development of the BNB Chain, which hosts over 4,000 projects. Despite his significant holdings in BNB tokens, which account for about two-thirds of the circulating supply, Zhao maintains he does not have stakes in most of the projects within the ecosystem.
Future Regulations and Global Context
As Hong Kong navigates its trajectory in the crypto space, it is expected to unveil a comprehensive set of regulations regarding digital assets by the end of the year. This forthcoming policy will refine the initial framework released in October 2022, aimed at fostering sector growth. The city’s efforts to become a global crypto hub come amid varied approaches to regulation by countries around the world, reflecting ongoing challenges in the fast-evolving digital currency landscape.