Under Secretary for Financial Services and the Treasury Joseph Chan (right), and Director of Licensing and Head of Fintech unit of the SFC Elizabeth Wong (left) attend a closed-door meeting to exchange viewpoints with industry leaders to foster the development of the digital asset industry in Hong Kong in Hong Kong on Aug 15, 2022. (PHOTO / INFORMATION SERVICES DEPARTMENT, HKSAR)
HONG KONG – A proposed regulatory regime of virtual asset service providers (VASPs) in Hong Kong would provide better clarity and asset protection to the investors, offering them advantages over other jurisdictions, according to industry leaders.
They made the statement at a closed-door meeting initiated by the Financial Services and the Treasury Bureau (FSTB) on Monday to exchange views with industry leaders to foster a more vibrant development of the digital asset industry in Hong Kong.
READ MORE: HK govt to enhance ability to combat terrorist financing
Senior executives from over 10 digital assets firms, as well as leaders from the legal and academia sectors, participated in the meeting virtually and in person, according to a government press release.
It is important to put in place a comprehensive regulatory system to build up market confidence, and hence provide a pathway to the sustainable development of the virtual asset industry in Hong Kong.
Joseph Chan, Under Secretary for Financial Services and the Treasury, HKSAR
During the meeting, the FSTB and the Securities and Futures Commission (SFC) updated the industry leaders on the key considerations behind the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022, which is currently under the scrutiny of the Legislative Council.
"We believe that the establishment of a licensing regime for virtual asset service providers with appropriate supervision can help ensure a gradual and healthy development of the market and protect investor interests,” said Under Secretary for Financial Services and the Treasury Joseph Chan.
On June 24, the Hong Kong Special Administrative government gazetted the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022, which seeks to impose statutory obligations by introducing a licensing regime for VASPs and a registration regime for dealers in precious metals and stones.
The government hopes the legislative proposal, which is pertinent to its fulfilment of FATF (Financial Action Task Force) obligations, will mitigate the risk of money laundering and terrorist financing in the city.
"It is important to put in place a comprehensive regulatory system to build up market confidence, and hence provide a pathway to the sustainable development of the virtual asset industry in Hong Kong,” he added.
Chan expressed his hope that the bill would be passed soon, and that the amended ordinance could take effect next year.
The SFC also explained the digital asset regulatory stance and direction.
Some of the digital asset firms attending the meeting have expressed their interest in applying for licenses under the upcoming regime.
ALSO READ: Bill to curb laundering, terror financing gazetted
Director of Licensing and Head of Fintech unit of the SFC, Elizabeth Wong; and Head of Fintech of InvestHK King Leung co-hosted the meeting.
The SAR government said it will continue to engage with the private sector stakeholders and listen to their suggestions, as it puts high emphasis on the development of the fintech industry.