Hong Kong to explore legalising crypto for retail investors

Hong Kong is “back in business” and exploring whether to legalise crypto trading by retail investors, the city’s finance chief announced Monday, kicking off a week of conferences aimed at resuscitating the Chinese hub’s image.

In contrast to mainland China where crypto has been all but banned, Hong Kong is looking to relax regulations and claw back some of the business that has left.

Years of strict pandemic controls and a political crackdown have hammered the Asian finance hub’s economy and sparked an exodus of talent that authorities say they now want to reverse.

A fintech conference opened on Monday and will be followed on Wednesday by a finance summit attended by some of the world’s top bankers.

“Hong Kong is open and inclusive towards the global community of innovators engaging in virtual asset businesses,” finance secretary Paul Chan told delegates at the fintech conference.

“In a great many ways, we are telling the world that we are back in business,” he added, in a speech that had to be delivered remotely after he caught Covid last week during an overseas trip.

In a new policy statement the government said it would launch a consultation to explore how the retail segment “may be given a suitable degree of access”. It added that Hong Kong was willing to review “property rights for tokenised assets and the legality of smart contracts”.

Currently Hong Kong restricts exchanges to clients with portfolios of at least HK$8 million ($1 million).

Expanding permission to retail investors would allow far more regular residents to invest in cryptocurrencies and virtual assets.But that carries its own risks.