Cryptographic regulations are a competitive business in Asia, with places like Hong Kong and Singapore competing to become the cryptographic center of Asia and capture the entire business associated with that state.
However, the challenge lies in preparing a rules book that balances investors protections with a welcome to companies and the new capital. And here, Hong Kong has an advantage over places such as Japan or Korea, since his framework of customary law for traditional finances has made his economy one of the most open and free of the world: a recent report of a Canadian thought considered Hong Kong the “freer economy” in the world, with Singapore just behind him in second place.
However, with Crypto, Hong Kong has moved relatively slowly, especially compared to Singapore. But Duncan Chiu, a member of the Hong Kong Legislative Council and president of his Technology and Innovation Committee, which supervises the technology and research parks of Hong Kong, says that the initial caution of the territory with respect to the regulation of cryptography It comes with advantages.
“Being a late engine is something good sometimes because you have a clear image,” Chiu said in a recent interview with Coindesk. For example, he pointed out how the Monetary Authority of Singapore (MAS), the main financial regulator of the city-state, has quickly moved to approve rules for crypto. Initially, MSA regulated cryptography under its payment services law, treating cryptography inaccurate as a payment tool instead of an asset class. Japan did the same from the beginning, forcing subsequent reviews in 2024, since the defi and tokenization finally won traction.
“While Hong Kong started late, the good thing is that there were clearer patterns of how these products were used,” said Chiu, who is one of the most outstanding voices for Crypto in Hong Kong, along with Legco Johnny Ng member . Chiu also pointed out how Bitcoin’s White Paper labeled the kind of assets as an electronic effective, while the reality of the market is that it has become more a merchandise, an opinion shared by the Commercial and Future Trade Commission of the The United States, as another example of how market behavior around crypto has evolved and needed regulations to adapt.
CONSTRUCTION REGULATORY ALIGNMENT
One of the key problems that Chiu said that he would like to work in the legco is to build a clear classification for different types of digital assets, such as cryptocurrencies versus the stables, while working with global regulators to guarantee alignment between them.
“We need clear definitions and segmentation,” Chiu explained. “Some assets must be regulated as values, while others must remain unregulated, such as Memecoins.”
According to Chiu, Memecoins must be treated as collectible, as well as Pokémon cards or stamps.
“Memecoins has no functionality behind them: they don’t use intelligent contracts,” said Chiu. “They are only collectible articles, so I do not see any reason to regulate them as financial products.”
A dedicated cryptographic regulator?
Given the only thing Crypto is as a class of assets, some jurisdictions, such as Dubai and its regulatory authority of virtual assets (rod), have created their own separate regulator for virtual assets.
When asked if he felt that Hong Kong should take the same way, Chiu recalled that in his early years in Legco, he had initially supported the creation of a digital version of the stock exchange and future commission (SFC), the market regulator of the markets of the markets of the territory, called, called the “spis”.
However, the Hong Kong government has chosen to maintain cryptographic supervision under existing financial regulators. The SFC has a dedicated digital asset team, while Hong Kong’s monetary authority (HKMA) Supervisa Stablecoins. Chiu said that for now, he is satisfied with this agreement, especially when the SFC expands its staff even when the government asks austerity in other places.
“The intention of the government is to keep everything under the SFC. They will have a team within the SFC and are hiring. We have just approved that in Legco, ”said Chiu.
Cryptographic Priorities of Legco
Chiu sees the OTC trade and custody regulations such as the next main priorities for the legco, while leaving rules of construction around cryptographic derivatives and commerce used to SFC exchanges and cryptography, instead of approving new laws.
Chiu believes that cryptographic regulation is a priority among the top five, others are mostly close to Hong Kong’s economic and public safety problems. But he acknowledges that not all his fellow members of Legco share this same urgency with respect to cryptographic regulation, and some wish to focus first on building more strict protection mechanisms, to avoid another FTX or JPEX, both whose failures left many in many in many In Hong Kong, and around Asia, with a large hole in his digital wallets
However, there is only a lot of legislative bandwidth available. The Hong Kong labor market is weak, and the real estate sector is in the precipice of a painful correction. Hong Kong is also caught between the United States and Continental China in Donald Trump’s next commercial war, which makes an economic recovery a challenge for the territory.
“Some members of Legco are great supporters of virtual assets, but not all, of course,” said Chiu. “Everyone has different priorities.”
