For months, there were several speculations around Hong Kong coming to a conclusion for banning retail trading in the country. Many market observers spoke about the speculations stating it was highly likely that Hong Kong regulators would resort to banning retail trading.
However, the recent developments in the matter seem to be telling an entirely different story. It is now expected and is highly likely that Hong Kong regulators may proceed and ban retail trading in the country.
Reuters had shared its report around the matter on Friday, May 21, 2021. The firm has revealed that the regulators have shared their consultation results with the public for visibility. The regulatory bodies involved in the decision-making were the Treasury Bureau and the Financial Services of Hong Kong.
The talks on the matter had been initiated back in November of 2020. That is when the speculations had started coming in from the market observers’ end about the future of retail trading. Finally, the verdict has been shared with the public that reveals that the regulatory authorities will proceed with banning retail trading.
As a result of the recent decision, once the new system is initiated, proper licensing will be introduced into the system. In order for any cryptocurrency exchange or any crypto-related firm to operate, they would need to have a proper operating license.
The Treasury Bureau and the Financial Services of Hong Kong would be responsible for issuing licenses to the crypto firms. Once acquired, the crypto firms will be allowed/authorized to operate in the country. Firms that do not acquire licensing will be involved in breach of the policy and would be causing harm to the country’s economy.
Therefore, the Hong Kong Government will be allowed to take strict actions against such firms. The local authorities will have full authority over the matter so any firm operating without a license would be met with strict regulatory actions.
The firms will have to comply with the regulatory update and infrastructure to avoid any legal actions. The regulatory authorities have added another major requirement for the crypto-firms to operate. That condition is that the firms will be able to offer their services to users that are qualified for trading/investing.
With immediate effect, not every investor in Hong Kong would be allowed to trade in cryptocurrencies. The cryptocurrencies will be limited to qualified investors that would have high portfolios. According to the regulatory authorities, investors with 8 million Hong Kong dollars’ worth of portfolio would be considered qualified.
At the time of writing, the 8 million Hong Kong dollars amount translates to one million United States dollars. Investors below the requirement would not be able to qualify for investing in cryptocurrencies. The regulators have taken this step to save the country from taking a hit on its economy if things go south.