The Bitcoin Association of Hong Kong disagrees with the city’s wave of crypto regulations and warns that they may hurt the city’s innovation and financial inclusion.
Hong Kong May Overregulate Crypto
The Bitcoin Association of Hong Kong has criticized the city’s cryptocurrency regulation plan. The association is appealing to regulators to reconsider the potential impact their move will have on the city’s digital future.
In November, the Government of Hong Kong announced a substantial change in how the city will interact with cryptocurrencies. The proposal seeks to ban retail cryptocurrency use and is part of Hong Kong’s crackdown against money laundering and terrorist financing.
According to a consultation paper by the Financial Services and Treasury Bureau, the regulations will also extend to the city’s network of Bitcoin automated teller machines. At present, Hong Kong hosts a total of 62 Bitcoin ATMs, CoinAtmRadar data shows.
Bitcoin Association of Hong Kong co-founder Leo Weese recently spoke to the South China Morning Post regarding the city’s regulations. According to him, restricting retail individuals from using and accessing Bitcoin would harm Hong Kong’s goals of promoting digital innovation and financial inclusion.
Mr. Weese also warned that the expanded oversight has created uncertainties for start-ups and their investments.
The regulation scheme would be a significant expansion of Hong Kong’s existing crypto licensing architecture. At present, the city only mandates the registration of crypto security exchanges and futures products.
Echoing Mainland China
The city’s tightening approach against cryptocurrencies echoes that of mainland China, where crypto trading is entirely prohibited. Hong Kong is currently one of the biggest hubs for crypto trading. The wave of regulations and strict punishments, which include the possibility of prison sentences for company executives, have put the industry on edge.
China has also taken a harsher approach to gambling this year, including a recent crackdown that ended with over 60,000 arrests or its recent decision to outright ban TripAdvisor and 150 other Apps out of gambling-related concerns.
The country’s relationship to gambling is complex and this is not a new phenomenon. China has been fighting gambling-related capital outflow for years now and has recently announced plans to stem the massive $146 billion outflow by introducing much stricter fines. However, this move would be beneficial for the special administrative region of Macau and help the gambling hub recover from the massive losses it endured because of this year’s lockdown.