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Letters | Hong Kong’s regulation of fintech must not stifle innovation
- Readers discuss the recently gazetted law that proposes a licensing regime for virtual assets, criticism of the state of press freedom in Hong Kong, and how social entrepreneurship has been used to support low-income communities during the pandemic
Reading Time:4 minutes
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As an international financial centre, Hong Kong has a world-class financial sector, but it has only a nascent fintech sector.
As one of the notable outcomes of fintech, virtual assets, including cryptocurrencies like bitcoin, have been gaining ground recently. The government recently gazetted the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022, proposing to introduce a licensing regime for virtual asset service providers.
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The bill stipulates that all virtual asset service providers should be licensed, and they can only offer services to professional investors. Yet, to qualify as a professional investor, an individual must have a portfolio of not less than HK$8 million.
The government is taking a very conservative approach to virtual assets. It seeks to impose a robust regime regulating virtual assets and their service providers, rather than establishing a virtual asset-friendly environment.
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Undeniably, Hong Kong government is obliged to preserve a safe and well-ordered market. It also has a duty to combat money laundering and terrorist financing, and guard against the risks that virtual assets may be used for fraud, scams or a method to extort money from naive speculators.
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