Brian Armstrong, founder and CEO of Coinbase, has warned that the United States risks losing its status as a financial hub in the long run due to a lack of clear regulations on cryptocurrency and a hostile regulatory environment. Armstrong has urged Congress to act swiftly and pass clear legislation to provide guidance on using digital currencies.
Armstrong cautions that other countries, such as the European Union (EU), the United Kingdom (UK), and now Hong Kong, are taking the lead in creating a legislative framework for the use of digital currencies.
Cryptocurrency is an open market that is accessible to anybody, anywhere in the globe. These remarks were made by Armstrong at a time when Hong Kong is in the process of seeking approval for an amendment to its Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022. This bill provides for a more expansive regulatory interpretation of cryptocurrencies.
Top crypto journalist says the comments caused misunderstandings
There has been some misunderstanding about Hong Kong’s cryptocurrency policy due to Armstrong’s comments, top blockchain reporter Colin Wu states.
He added that while Hong Kong is promoting WEB3, the future of digital currencies is still uncertain. Hong Kong has a limited number of cryptocurrencies that can be listed on compliant exchanges such as BTC ETH.
The industry expects the amended bill to be approved next year, but its effects are already evident. Many non-compliant exchanges, such as FTX and BITMEX, have left Hong Kong, and others are applying for relevant licenses.
The Hong Kong Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022, when passed, will require all entities engaging in crypto or virtual asset-related business to apply for a license.
Those who trade in BTC and ETH only have until March 1, 2023, to obtain a license voluntarily. After that date, anyone engaging in digital currency-related business in Hong Kong, including providing wallet services, must apply for a license. The policy is meant to provide a regulatory framework for virtual assets and reduce risks.
Interpreting the new policy in Hong Kong
Hong Kong’s Securities and Futures Commission head of financial technology has mentioned that Hong Kong has its own set of policies related to virtual assets and not those of mainland China.
The Hong Kong government is willing to open up discussions on the opening up of individual investors. The policy declaration announced that some legislation should be made for smart contracts to consolidate their legitimacy, helping Web3.
There are no legal barriers to starting a business in Hong Kong, especially for WEB3 startups. Hong Kong’s legal framework encourages and welcomes such businesses.
Compliance is high, the risk is low, and a set of rules can guide tokenization. The rules of the rule of law environment for starting a business in Hong Kong are clear.
The key to success is implementing these rules step-by-step, which could be challenging, but the benefits are significant. While other nations such as the EU, the UK, and Hong Kong are making strides in developing a regulatory framework for digital currencies, Hong Kong’s policy is not yet clear.