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Analyst: Hong Kong SEC to release criteria on crypto exchanges, big for the industry

According to Dovey Wan, founder at Primitive Ventures, the Hong Kong Securities and Exchange Commission (SEC) is set to release a crypto exchange application guideline.

Wan said:

“Hong Kong SEC will announce detail in about an hour regarding cryptocurrency exchange application criteria. Considering Huobi has already backdoor listed on HKex, this will definitely play them a huge favor to be the first legalized Chinese crypto exchange.”

The decision of the Hong Kong SEC to establish a direction for local crypto exchanges comes after the introduction of a national blockchain initiative by the Chinese government.

Why this is big for the global crypto market

Over the past two years, ever since the official imposition of a cryptocurrency trading ban by the government of China, most traders in the region are said to have moved into the Hong Kong cryptocurrency exchange market.

Many Chinese investors trade cryptocurrencies through over-the-counter (OTC) trading platforms based in Hong Kong, by selling and purchasing stablecoins like Tether (USDT) with a slight premium.

As said by Wan, the establishment of a clear guideline for crypto exchange applications could benefit exchanges that are used by Chinese investors like Huobi.

She said:

“Huobi is an effective Chinese exchange – run by Chinese team locally in mainland serves primarily Chinese customers. They spent huge effort to re-structure into a ‘foreign company’ after the 2017 China crypto ban. And the cost of the Hkex shell is not cheap too.”

It would also grant crypto exchanges strong legal basis to operate within Hong Kong, which could potentially solve banking services-related issues cryptocurrency trading platforms have struggled to deal with.

Not just for Huobi

The guideline from the SEC is expected to positively affect most exchanges based in Hong Kong that primarily facilitate trades for investors based in mainland China.

It also means that as cryptocurrency exchanges in Hong Kong are allowed to maintain operations on a more stable footing with clarified regulatory frameworks, creating a more practical environment for investors in China to invest in the asset class.

However, Chinese state-owned newspaper People’s Daily reported on a column released on November 4 that the government vehemently against speculation around crypto assets, and that its positive stance towards blockchain development does not necessarily equate to crypto investment. The People’s Daily said:

“There is no doubt about the potential and the direction of blockchain development. Speculation has to be prevented and through a competitive environment, space for blockchain development has to be opened.”

The post Analyst: Hong Kong SEC to release criteria on crypto exchanges, big for the industry appeared first on CryptoSlate.



Source: Analyst: Hong Kong SEC to release criteria on crypto exchanges, big for the industry

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