China’s Capital Quietly Backs up Hong Kong’s Crypto Hub Ambitions

Updated: 21 February 2023

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According to reports, the Chinese government subtly supports Hong Kong’s vision of becoming a cryptocurrency powerhouse. The support contrasts with the mainland’s strict anti-crypto stance.

What: China’s capital, Beijing, quietly supports Hong Kong’s crypto hub vision.

Why: The development comes after Hong Kong’s Securities and Futures Commission (SFC) announced that it would allow retail investors to trade cryptocurrencies.
What next: China’s support to Hong Kong in crypto matters will see many crypto businesses expand into the city.

A new Bloomberg report has revealed that China’s Liaison Office representatives have attended crypto gatherings in Hong Kong. Bloomberg noted that their interactions had been “friendly,” citing unnamed sources. Additionally, sources claimed that the officials have been monitoring the progress and requesting reports and updates. In some instances, the representatives have made follow-up calls.

This development is noteworthy given China’s strict anti-crypto stance, which could signal a shift in the country’s attitude towards cryptocurrencies. Local crypto industry operators have interpreted China’s involvement as a sign that Beijing may be inclined to use Hong Kong as a testing ground for cryptocurrency, albeit in a very subtle manner. China banned crypto trading in 2021.

On 20 February 2023, the Securities and Futures Commission of Hong Kong announced its intention to permit retail investors to trade cryptocurrencies like Bitcoin and Ethereum. However, all centralized exchanges operating in the region must apply for licenses with the regulator.

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