Hong Kong’s crypto licensing pipeline is moving again. The Securities and Futures Commission has approved a new digital asset license for Victory Fintech (VDX), an affiliate of listed brokerage Victory Securities.
The approval allows Victory Fintech to operate a regulated crypto trading platform in the city. Notably, this is the first new crypto license added to the SFC’s official registry since June 17 last year, ending a months-long pause in approvals.
The move comes at a time when Hong Kong has established itself as a crypto-friendly city with an aim of becoming a prominent, regulated Asian virtual asset hub by 2026.
The city has 0% capital gains tax on long-term crypto investments, explicit licensing for exchanges through the SFC, and support for crypto ETFs.
Hong Kong’s move signals optimistic approach towards digital assets
The move shows that Hong Kong is still slowly growing its regulated crypto ecosystem instead of shutting the door on new companies, even though it is still being careful with how it oversees virtual asset firms.
Hong Kong put in place its current rules for crypto service providers in 2023. The goal was to turn the city into a digital asset hub that was compliant and well-supervised.
HashKey Exchange and OSL Digital Securities were the first two platforms to get approval under the new rules, with the approval setting the stage for a very strict licensing process.
The list of approved platforms has grown to 12 since then. Bullish, a New York Stock Exchange-listed company and the parent company of CoinDesk, is one of them.
However, many believe that Hong Kong has one of the toughest regimes among the world’s leading financial hubs.
Some of the global players have retreated because the compliance hurdle is so high. In May 2024, the giants in the sector, OKX and Bybit, withdrew their applications for licenses, which shows how difficult it is to comply with the rules laid down by the city.
Hong Kong set to issue first stablecoin licenses next month
Hong Kong is getting ready to give out its first stablecoin licenses next month. The move represents another step towards becoming a regulated crypto hub.
At first, officials plan to be careful and only give out a small number of licenses.
Regulators say that the phased approach will let them see how the framework works in real market conditions, keep an eye on possible risks, and make sure that licensed companies follow all the rules.
Hong Kong’s goal is to promote innovation in digital assets while keeping the economy stable and protecting investors.