Hong Kong Regulator Acknowledges Bitcoin’s Resilience
Julia Leung, the CEO of Hong Kong’s Securities and Futures Commission (SFC), has acknowledged Bitcoin’s staying powerin the face of market fluctuations.
Hong Kong’s SFC Admits Bitcoin’s Resilience
The Hong Kong regulator boss admitted Bitcoin’s resilience at the Greenwich Economic Forum on Wednesday. As the largest cryptocurrency by market value in the last 15 years, she agreed that Bitcoin had survived multiple cycles of “boom and bust.”
This is coming at a time of strong contestation about the cryptocurrency’s intrinsic value. Corroborating this, Leung admitted that economic experts and bank executives have consistently debated the value of Bitcoin and Ether.
Speaking on Bitcoin’s trajectory, she mentioned that Bitcoin has demonstrated tenacii to be an alternative asset. But in a swift submission, Leung said she supports the Distributed Ledger Technology (DLT) – Bitcoin’s technological framework, rather than the actual cryptocurrency.
Leung stated that DLT is beneficial, and the potential remains obvious. She said it can improve the distribution, clearing, settlement, and custody of physical assets while reducing expenses.
However, she also struck a cautious note by suggesting that digital collectibles and non-fungible tokens (NFTs) “may be a fad” even with a useful underlying technology – the DLT. Leung admitted that tokenization may lead to “wider financial inclusion, fractionalization, custody and ownership, all on the chain.”
However, Leung submitted that blockchain networks need growth and maturity to ensure cross-border interoperability among financial institutions. This, she said, is also required to fully enjoy the benefits of blockchain technology in the financial sector.
From the copy of her speech at the Forum, Leung extensively acknowledged the growth of Hong Kong’s Web3 ecosystem. But, she characterized virtual assets as extremely speculative and subject to sharp price swings. Therefore, she said her latest comments shouldn’t be seen as an endorsement.
With this latest acknowledgement from the SFC’s chief, an X user projected that clarity on regulation and adoption is around the corner
Major validation from Hong Kong's SFC CEO! Recognizing Bitcoin's resilience and the staying power of DLT is a significant step towards mainstream acceptance. Regulatory clarity and adoption can't be far behind @WuBlockchain
— topGcrypto (@topGcrypto_) June 6, 2024
Hong Kong’s Blockchain Regulations
Leung’s remarks coincide with the formal launch of the SFC’s licensing program for cryptocurrency trading platforms. This step mandates all exchanges catering to Hong Kong’s retail investors to acquire requisite licenses.
Hong Kong’s SFC has put up several safeguards to regulate the cryptocurrency space. They are to accommodate investor demand for virtual assets while also protecting them.
On May 28, SFC revealed its plan to conduct on-site inspections of crypto platforms after the licensing deadline scheduled for June 1. The SFC stated that any unlicensed VATP in Hong Kong after the deadline will be considered a criminal offense.
Despite the continuous crackdown on unlicensed crypto firms in Hong Kong, the SFC’s approval of spot Ethereum and Bitcoin exchange-traded funds (ETFs) has been seen as a positive move that gives Hong Kong a cryptocurrency-friendly outlook in the Asian region.
