Hong Kong tries to align its money management policies more with international anti-money-laundering policies. Financial Secretary Paul Chan had an annual budget speech yesterday. He highlighted new policies about anti-money-laundering in cryptocurrency space.
The importance of regulation
Chan’s annual budget speech had multiple sections. The 114-page document that published yesterday included plans for riding out of the current financial crisis in Hong Kong and also developing a diversified economy in the city. Besides, Chan talked about estimates for the present and the coming year.
Chan pointed out to diversify Hong Kong’s economy in multiple topics. He admitted the importance of the securities and bonds market. After all, the financial secretary calls comprehensive regulation an essential part of developing a diversified economy.
“The Financial Action Task Force (FATF), an international regulatory body, completed a comprehensive evaluation of Hong Kong’s anti-money laundering and counter-terrorist financing (AML/CTF) regime in mid-2019. Hong Kong is the first jurisdiction in the Asia-Pacific region having successfully passed the FATF assessment”, said Chan. He asserts that the government will continue to enhance AML/CTF regulations.
Hong Kong’s plan to collaborate more with the FATF organization means more actors in the district should follow the regulations needed by that. Therefore, virtual asset service providers group that includes cryptocurrency exchanges and similar businesses will be incorporated into the regulatory framework. The government will also implement more international standards on banking regulations.
Growth of the ecosystem
FATF regulation doesn’t mean that crypto actors in Hong Kong can’t do business. Maybe some more regulatory framework will rase opportunities for them, so further development and user gaining would be easier for them.
Regulation means more users trust the crypto ecosystem. When the user-base grows as a consequence of regulatory and trust, you can expect more companies to enter the industry.
There are now more than 11 crypto exchanges active in hong kong, and the ecosystem now has the opportunity to grow and attract new investors as they trust a regulated industry more than anything.