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Opinion | How new blockchain, cryptocurrency rules can give Hong Kong an investment edge
- A more mature and stable market could quickly develop if the regulatory approach is crafted to attract institutional market entrants while striking a balance to allow new players to innovate
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Change is coming for Hong Kong’s digital asset markets with the Legislative Council likely to consider new regulation governing blockchain and cryptocurrencies soon.
The momentum has been building for five years through the publication of white papers and statements from the Monetary Authority, Financial Services and Treasury Bureau, and Securities and Futures Commission.
An analysis of these regulatory pronouncements suggests that Hong Kong will see a more professional and institutionalised digital assets market.
The introduction of rules where none had existed will lead to some regulatory arbitrage, but if the approach is crafted to attract new institutional market entrants, the net impact could be positive for Hong Kong as a premier regional investment destination.
The institutional adoption of cryptocurrencies and blockchain digital assets is the starting point of a faster journey towards greater market maturity.
The differences in investment strategies between institutional and retail market players mean that institution-heavy markets trend towards greater stability.
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