New Hong Kong Crypto Regulations Take Effect – Crypto News – Crypto News
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New Hong Kong Crypto Regulations Take Effect New Hong Kong Crypto Regulations Take Effect

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New Hong Kong Crypto Regulations Take Effect – Crypto News

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Hong Kong’s new cryptocurrency regulations came into effect on June 1 as the territory’s government seeks to bolster the region as a hub for fintech and web3. More than 800 fintech firms currently operate in Hong Kong.

Hong Kong’s new regulations cover the safe custody of assets, segregation of client assets, and cybersecurity standards. The framework also includes heightened rules for virtual asset platforms seeking to offer products to retail investors compared to other jurisdictions.

Ben Roth, co-founder and CIO at Auros, a crypto trading firm, told The Defiant that Hong Kong’s new regulatory environment is “a major step in the maturation of the industry.”

“This is an important development in crypto’s next phase of growth, and sophisticated liquidity providers will be well placed to act as the ‘grease in the wheels’ of innovation,” Roth said.

Roth said his firm recently observed an uptick in interest in Hong Kong from “prominent capital allocators. “These players want to be well positioned to take advantage of a clear regulatory framework,” he said.

Serra Wei, the CEO of Aegis Custody, told The Defiant that Hong Kong’s new virtual asset licensing regime is “a game-changer for the crypto market.”

Wei said Hong Kong’s progress serves as a “wake-up call for the US market,” adding that US-based crypto firms should “look beyond domestic operations and embrace global opportunities” to ensure future growth.

In recent months, Coinbase, circleand Ripple have each expressed an interest in expanding their operations abroad in response to an increasing hostile regulatory climate towards crypto firms in the United States.

First Digital Announces USD Stablecoin

First Digital, a Hong Kong-based trust company, said that it would launch a compliant dollAR-pegged stablecoin on Ethereum and BNB Chain called FDUSD.

First Digital said Its programmable stablecoin is backed by “high-quality reserves” comprising USD cash and cash equivalents held by regulated financial institutions in Asia. The reserves are held in segregated accounts per Hong Kong law to prevent the co-mingling of FDUSD reserves with other assets owned by First Digital.

“First Digital is fully committed to regulatory compliance to set a new standard for legitimacy in the space,” said Vincent Chok, First Digital’s CEO.

Per the new rules, FDUSD won’t be available to retail traders in Hong Kong. Individuals and businesses interested in using FDUSD must contact the company via its website.

Changpeng Zhao, the CEO of Binance, tweeted about FDUSD launching on BNB Chain.

Last year, the world’s largest crypto exchange began unwinding support for prominent centralized stablecoins USDC, USDP, and TUSD amid the growing popularity of the Binance-licensed and Paxos-issued BUSD.

However, the New York Department of Financial Services ordered Paxos to stop issuing the BUSD stablecoin in February, prompting the exchange to begin relisting pairs including USDC and TUSD in recent months.

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