Regulation of Virtual Assets in Hong Kong
Julia Leung, CEO of the Securities and Futures Commission (SFC) in Hong Kong, revealed that the commission established an initial framework for regulating virtual assets back in 2018, focusing on safeguarding investors. In light of various market cycles and geopolitical developments, Bitcoin has increasingly been recognized as a viable alternative investment and a means to enhance financial dominance.
Regulatory Strategy and Market Adaptation
Leung highlighted that Hong Kong’s regulatory approach follows the principle of applying the same regulations to all businesses with similar risks. The SFC aims to extend regulations not just to licensed exchanges, but also to over-the-counter (OTC) trading platforms and custody services as part of its future strategy.
“The current economic landscape has led to increased volatility in capital markets, defining it as the new standard.”
To adapt, the SFC must employ a regulatory strategy that is both flexible and robust, ensuring that Hong Kong’s financial landscape remains resilient while capitalizing on the city’s distinctive advantages to pursue new opportunities.
Visualization of the Regulatory Framework
In essence, the SFC’s regulatory framework can be visualized as “one strong shield” and “three sharp arrows”, where the shield represents the resilience of the market and financial institutions, and the arrows signify targeted initiatives intended to tap into the market’s growth potential.
