HONG KONG: Hong Kong has decided to let retail investors trade cryptocurrency under its new regulatory regime because “virtual assets are going to stay”, the city’s minister overseeing financial services said on Tuesday.

Cryptocurrencies have been banned in mainland China since 2021, but the former British colony, which has a separate financial system and regulators, has announced plans to become a major digital asset hub.

From June 1, authorities will begin accepting applications for licences from cryptocurrency exchanges that will allow them to sell major tokens including bitcoin and ether to individual traders.

“Despite the potential risks involved, (virtual assets) also carries with it fundamental value,” Christopher Hui, Hong Kong’s secretary for financial services and the treasury, told AFP in an interview.

“So for these positive elements to be harnessed, these activities have to be allowed in a regulated way.” Regulators around the world are examining cryptocurrencies with renewed urgency following the collapse of the trading platform FTX last year and other high-profile failures in the sector.

Asked whether Beijing backed Hong Kong’s plans to open up crypto trading, Hui said the finance hub charts its path by following the emerging global consensus.

Published in Dawn, May 31st, 2023