As a reminder, the cryptosphere in mainland China is under pressure from strict bans. In the spring of 2021, Bitcoin mining was completely banned there, and in the autumn, ordinary people's interaction with digital assets was outside the law.

Of course, the ban does not work perfectly: as it turned out earlier, many miners simply continued their activities in the country unofficially.

However, the situation is now gradually changing. China is slowly coming out of the pandemic restrictions and making it easier for businesses to operate in the country. Well, Hong Kong officials’ new initiatives in the digital asset industry could become a tacit loophole for many Chinese cryptocurrency companies. Still, as it became known the day before, it will become completely legal for residents of the region to own and trade cryptocurrencies in the summer of 2023.

Gemini cryptocurrency co-founder Cameron Winklevoss reacted to the news. He believes that Asia will end up being the main driver of the new bullrun in the cryptocurrency market.

What will happen to cryptocurrencies in Hong Kong

Paul Chan gave a speech on the integration of innovation. Here is one of his quotes published by the news outlet Decrypt.

As a next step, I will create and chair a task force on virtual asset development that includes representatives from relevant policy bureaus, financial regulators and market participants. This is necessary to make recommendations for the sustainable and responsible development of the sector.


Accordingly, the experts will then work to define the boundaries within which the digital asset industry will operate in the region. It is particularly important that the working groups will involve market participants themselves, who understand what is going on. Perhaps this will avoid the misunderstandings faced by blockchain platforms in the US.

As a reminder, the lack of clear regulation has resulted in some of these companies receiving fines and demands to stop certain activities. For example, in the first half of February, crypto-exchange Kraken was forced to shut down its steaming platform for US users. In addition, it paid a $30 million fine to avoid a lawsuit.


In 2018, only professional traders were allowed to trade digital assets in Hong Kong, leaving the activity of ordinary traders banned. Since late last year, however, Hong Kong officials have begun hinting at easing these rules and restoring Hong Kong’s status as one of the world’s leading cryptohubs.

Rumours of a more liberal policy towards crypto in the region were confirmed this week when the Hong Kong Securities and Futures Commission (SFC) published a new document. The latest suggests allowing access to virtual asset trading platforms for all types of investors, subject to certain conditions.

The crypto business is already teasing good news – for example, the exchange Huobi announced earlier that it is working on obtaining a license in Hong Kong. Here’s a relevant screenshot of a tweet from representatives of the trading platform.

Also, the possibility of a move to Hong Kong was announced by Tron creator and well-known representative of the blockchain community Justin Chan.

Chan’s speech announced HK$50 million, or US$6.37 million, to support Web3 in Hong Kong’s creative digital community Cyberport. This centre was launched in January and aims to support local firms and attract international companies to the city. And that’s not all: the positive news from Hong Kong can be seen as a change of heart from the Chinese government towards cryptocurrencies.

😈 YOU CAN FIND MORE INTERESTING THINGS ON OUR YANDEX.ZEN!

Meanwhile, in the US, the cryptocurrency regulatory arena is failing in crisis. Blockchain Association CEO Christine Smith said the day before that the US Congress should have “taken the process into its own hands” as US regulators represented by the Securities and Exchange Commission (SEC) are working on new laws for crypto “behind closed doors”.

According to Smith, Congress is currently in a difficult position as many politicians in Washington who were “close” to former FTX CEO Sam Bankman-Fried feel “betrayed” by the collapse of the crypto exchange in November 2022. As a reminder, Sam has been featured in a massive lobbying campaign for his interests: he has sponsored both Democrats and Republicans.

Christine Smith is hopeful that proper regulation of Stablecoin will still take place in the US. She also said that Congress has been considering the issue “since 2019” and “the work has already been done”, Cointelegraph reports. Most interestingly, officials allegedly already wanted to introduce some new regulations just before FTX’s bankruptcy, but that never happened.


We believe that China's dramatic change in attitude towards digital assets could indeed lead to a better reputation for cryptocurrencies. Such changes seem particularly timely against the backdrop of what is happening in the US, where regulators are putting more and more sticks in the wheels of local entrepreneurs and developers. It's possible that many of them might actually end up wanting to move to Hong Kong.