HKSAR Chief Executive John Lee delivered his first political speech on Wednesday, stating that the administration has proposed a bill to establish a legal licensing regime for virtual asset service providers.

In his first political speech before the Legislative Council, the leader of Hong Kong, who assumed authority in July as tCarrie Lam’s successor, expressed his stance towards virtual asset regulation and prospects as well as development in terms of digital Hong Kong dollars, according to the latest published policy speech.

Speaking of virtual assets among various topics, Lee said:

“On virtual assets, the Government has submitted a bill to propose the establishment of a legal licensing regime for virtual asset service providers. The Hong Kong Monetary Authority (HKMA) is reviewing market feedback on stablecoin regulation and will ensure that the regulatory regime is in line with international regulatory recommendations and the local context.”

Currently, only one licensed virtual asset trading platform, OSL, is listed with the Securities and Futures Commission (SFC) as of August 2022; while another private company, Hashkey Group, has obtained Approval in Principle to operate an SFC-licensed virtual asset trading platform in Hong Kong from 2020.

Earlier, Lee’s deputy, Financial Secretary Paul Chan, touched on the policy statement related to digital assets during the upcoming Fintech Week in late October.

Hong Kong continues to struggle for economic recovery and revival amid the COVID-19 pandemic, and is also facing strong regional and global competition. The city has joined other countries in the world to study the adoption of digital currency to boost the economy and its currency in the long term.

The policy direction says that the HKMA has also begun preparatory work to issue “e-HKD” and is collaborating with mainland Chinese institutions to expand testing of “e-CNY” as a cross-border payment facility in Hong Kong. .

Lee’s policy implementation comes after his speech in July, pledging to explore central bank digital currency in terms of retail level (rCBDC), and scaling the stage for the implementation of the mBridge initiative, a collaborative CBDC project between HKMA and the central banks of Thailand, China, the United Arab Emirates and the BIS to improve cross-border trade of multiple currencies. Payments

According to government statistics, there are more than 600 Fintech companies in the city. Lee said the administration “is vigorously promoting fintech by encouraging more fintech services and products to undergo proof of concept, pushing cross-border fintech projects, and nurturing fintech talent.”

In addition, “Business Data Exchange will be launched this year to provide a comprehensive platform for companies to share operational data, which will allow banks to make accurate assessments on the operating conditions of companies and give SMEs a better opportunity to get loans. ”, according to the address of the policy.

Image source: Shutterstock