“hong Kong Cryptocurrency: The Future Of Asian Investments”

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To analyze the future of Hong Kong as a crypto-center, take a closer look at its colorful paper money: Comment Most countries only allow the government to issue currency, but in public-private partnership countries, Hong Kong dons are legal tender issued by private banks. .

“hong Kong Cryptocurrency: The Future Of Asian Investments”

Hong Kong is one of the few economies in the world, Great Britain. On the other hand, private banks issue official banknotes. In fact, three banks are currently licensed by the Hong Kong Monetary Authority (HKMA) to print Hong Kong banknotes, but most countries only issue banknotes through one central bank or government issuing authority.

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This public-private partnership model provides Hong Kong with greater confidence in the system, as it is widely recognized that statutory state-owned monopolies are less able to optimize goods and services for the public than privatized models. It also details how virtual assets will be integrated into the city’s economy in the near future.

Hong Kong regulators are progressively developing the Web3 and virtual asset industry. Following Hong Kong FinTech Week 2022, when the HKMA and the Hong Kong Securities and Futures Commission (SFC) announced plans to introduce official policies to encourage the development of digital assets, the city benefited from the positive sentiment and intent towards virtual assets, including cryptocurrencies. .

In addition, the historical smooth operation of the city’s decentralized HKD issuance model suggests great potential for closer cooperation between regulators, traditional finance and local virtual asset institutions. This will further accelerate the development of the virtual asset market, as the government has repeatedly stated its intention to lead the Hong Kong region in the digital asset market. In fact, Hong Kong is the only jurisdiction whose regulator requires existing banks to accept and serve crypto companies. The US is at the peak of growth. Even its regulators have not given a clear signal of intent.

Clarity is the name of the game for Hong Kong regulators looking to rapidly grow the city’s virtual assets sector. The need for crypto exchanges to obtain a full license from the SFC from June 1 this year to legally operate in Hong Kong will create less ambiguity. Disambiguation is key to the digital asset border, US.

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This has led to many positive responses and entry into the market of digital asset firms and interest in coordinating and working with the regulatory regime to ensure a healthy ecosystem structure. This is in stark contrast to the apparent ‘them vs us’ divide between US regulators and cryptocurrency heroes.

If the Hong Kong dollar issuance scheme is any indication of how things will develop, market players will find natural routes to market and regulatory cooperation. We can consider joint market education efforts, such as the HKMA’s recent engagement with local banks and companies to combat credit card fraud and jointly develop future policies and regulations.

Hong Kong has long been a leader in financial markets, and recent government initiatives such as tokenized “green” bonds are further proof of the public-private partnership success story. The HKMA and the Hong Kong government have successfully launched the world’s first HK$800 million government-issued tokenized green bond. Tokenized green bonds are carefully designed and issued in collaboration with many different banks.

The city intends to implement special licensing measures for stablecoins by 2024, as well as make the regulatory environment as clear as possible for operators.

The Idea Of A Web3 Financial Platform For Hong Kong

A potential game changer is eco-friendly textiles, cryptocurrencies that are pegged to the value of a widely recognized fiat currency such as the US or Hong Kong dollar. They create the missing bridge between traditional financial markets and the emerging digital economy, facilitating smooth and efficient digital transactions.

A recent research paper proposing a HKD-pegged stablecoin was written by Wang Yang, Vice-Chancellor of the Hong Kong University of Science and Technology and Chief Scientific Advisor of the Hong Kong Web3 community, together with angel investor Cai Wensheng, founder of BlackCity Li. Zhybin and other authors. Ph.D Student Wen Yizhou. It is assumed that such a tool can bring a number of benefits, such as increasing financial accessibility, increasing the efficiency of transactions, reducing costs, improving payment systems and strengthening the city’s financial technology capabilities.

The public-private partnership theme continues the government’s current idea of ​​allowing private companies to issue stablecoins. This proposed model allows for more diversity in the stablecoin ecosystem than a model based entirely on the public sector. In terms of sheer scale, the HKD-backed stablecoin benefits from the city’s massive foreign exchange reserves totaling $430 billion, giving it a significant market capitalization advantage over the current stable offerings of USDT and USDC.

In any case, the current discussions and the buzz they have generated are important positive indicators that Hong Kong is ready and willing to take the next step. With a history of successful public-private partnerships shaping a world-class economy, the city’s future in digital assets appears to have a clear and progressive path.

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Vincent Chok is the CEO of First Digital Trust, a fully regulated firm headquartered in Hong Kong that provides trust management and digital asset custody services to individual, corporate and institutional clients. Prior to founding First Digital Trust in 2017, Vincent served as CEO of Legacy Trust. He previously worked in mortgage lending and raised capital for commercial real estate in Canada’s liberalized securities market.

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