Only millionaires will be allowed to trade Bitcoin and cryptocurrencies in Hong Kong if the FSTB proposal is passed by the city’s legislature.
Hong Kong regulators have moved to ban retail trading in Hong Kong after months of intense speculation about a likely prohibition.
According to a report by Reuters on Friday, the Financial Services and the Treasury Bureau of Hong Kong has released the results of its consultation on a possible retail crypto trading ban, which began back in November 2020.
As part of its conclusions, Hong Kong’s FSTB called for a comprehensive licensing regime for crypto exchanges while restricting trading only to qualified investors. Per Hong Kong law, only individuals with portfolios worth 8 million Hong Kong dollars (about $1 million) qualify as professional investors.
For the FSTB, the retail crypto trading ban is necessary at least in the early stages of the comprehensive crypto licensing regime. The FSTB reportedly plans to present its conclusions before legislators in Hong Kong to facilitate the passage of the proposal into law.
If passed, the proposed licensing regime will also replace the current opt-in paradigm for crypto exchanges in the city.
By limiting crypto trading in Hong Kong to persons with portfolios worth at least $1 million, the FSTB is potentially excluding up to 93% of the city’s population from gaining access to cryptocurrencies.
Several stakeholders in Hong Kong’s vibrant crypto industry have expressed their dissatisfaction with the plan in the past, arguing that the move was inimical to the government’s goal of encouraging financial innovation.
In another related development, Hong Kong’s government is reportedly planning to empower the city’s Securities and Futures Commission to withdraw the licenses of already authorized crypto exchanges.
Tweeting on Friday, Chinese crypto media outlet 8BTC News revealed that the SFC may soon be given the power to exercise the right at will.
Back in November 2020, the SFC announced a proposal to expand its crypto oversight responsibilities beyond security tokens to cover all digital asset service providers.