Hong Kong Stock Exchange Is Active With New Crypto Regulation Efforts

The Hong Kong Stock Exchange (HKEX) is in the crypto news lately – this time for putting new efforts towards regulation of finance and crypto in the country. The world’s sixth largest stock exchange recently shared the need for regulation in a research paper, keeping up with the pace of financial technologies.

As the paper notes, the existing laws of finance should be applicable to the companies in the fintech space – mostly based on their resemblance with the traditional services. In this manner, blockchain, for example, could be brought inside the space of investment, trading, clearing as well as settlement.

As HKEX noted in the paper:

“Despite the difference in Fintech regulations among countries, the principle of consistency generally applies, i.e. financial services with the same nature are subject to the same regulations under the existing legal framework, so as to maintain fair competition, ensure regulatory effectiveness and prevent regulatory arbitrage.”

In this manner, crypto innovations can improve the system as much as they can hurt it. The HKEX paper also points out to other countries and their blockchain testing labs.

Towards the end, the report also touches the point that testing models should be extended to non-banking sectors such as blockchain and crypto, stating:

“Given that Fintech Supervisory Sandbox (FSS) is timely and flexible in making a regulatory response to market innovations, it can encourage Fintech innovations and minimize the negative impact of regulatory uncertainties with effective risk prevention and control. It is, therefore, the most suitable regulatory tool for Fintech.”

With this, the HKEX is definitely among the pioneers in the field of regulation in Hong Kong, discovering and implementing new regulations.