Coinbase invited to set up shop in Hong Kong
Johnny Ng, a legislator from Hong Kong, has taken to Twitter to invite Coinbase and other crypto exchanges to establish a presence in the region against a backdrop of increasing hostility in their home jurisdictions.
The member of the Legislative Council expressed his willingness to assist Coinbase and other interested platforms in the registration and development process within the former British colony. He also hinted at potential opportunities for stock listings, highlighting Hong Kong’s progressive approach towards cryptocurrencies.
“I hereby offer an invitation to welcome all global virtual asset trading operators including Coinbase to come to [Hong Kong] for application of official trading platforms and further development plans,” Ng tweeted.
The move also comes a few weeks after Hong Kong’s regulator revealed plans to permit licensed cryptocurrency platforms to cater to retail investors under its new regulatory framework for the sector.
The proposed guidelines encompass various aspects such as asset custody safety requirements, cybersecurity standards, and the segregation of client assets, among others. This was implemented from June 1, coinciding with the launch of a new licensing regime for virtual asset platforms.
I hereby offer an invitation to welcome all global virtual asset trading operators including @coinbase to come to HK for application of official trading platforms and further development plans. Please feel free to approach me and I am happy to provide any assistance. pic.twitter.com/bcIi1IjMlc
— Johnny Ng 吴杰庄 (@Johnny_nkc) June 10, 2023
Nevertheless, the SFC will keep retail traders prohibited from trading stablecoins until new regulatory arrangements are put in place for these assets. The decision comes after the SFC concluded its consultation paper on regulating crypto activities, where it highlighted the need to focus on the risks associated with stablecoins and their regulation.
The regulator said it wants to ensure that stablecoin reserves are appropriately managed to maintain price stability and safeguard investors’ ability to exercise redemption rights. It emphasizes that if these risks are not effectively managed, they could have significant implications for the stability of a stablecoin.
The move towards more crypto-friendly regulation is part of Hong Kong’s efforts to restore its position as a leading financial center following the pandemic and political unrest in the territory. Although there has been no change in China’s official stance on cryptocurrencies, which remain heavily restricted on the mainland, there are indications that Hong Kong’s push to become a major hub for digital assets has the support of Beijing.