Hong Kong is set to unveil a new regulatory regime for its crypto industry which would include comprehensive rules and policies to govern crypto entities operating on the island. The widely anticipated regulations from the city-state have led to speculation about a bull run triggered by regulatory clarity and a potential surge in market liquidity.
The Chief Executive of Hong Kong’s Securities and Futures Commission (SFC) initially revealed the special administrative region’s plans to implement the new crypto regime last month. In a one-on-one discussion hosted by Bloomberg, CEO Julia Leung stated that the new regulatory requirements for virtual asset service providers would take effect on June 1, 2023.
Eddie Yue, the CEO of the Hong Kong Monetary Authority (HKMA), stated earlier this month that the new regulatory regime would enforce tight regulations on crypto entities. He revealed that the new regime would foster an ecosystem of growth and excitement, but “that doesn’t mean light-touch regulation.”
According to Yue, the strictness of the new regulations would be at a reasonable level, allowing for transparent governance of the crypto industry. The most anticipated element of the new regime is arguably retail crypto trading. Retail investors would be allowed to trade mainstream crypto assets, including Bitcoin and Ethereum.
The sentiment surrounding Hong Kong’s upcoming crypto regime is highly optimistic among the crypto community on Twitter. Crypto influencers are touting this landmark event as a potential trigger for the next bull run in the crypto market. Part of the bullish sentiment could be attributed to the regulatory clarity that Hong Kong’s regulators would bring to the industry. This would restore the investors’ confidence that has been eroded due to the lack of clear regulations in the West.
The impact of the new regulatory regime would not be limited to the city-state. Crypto influencers on Twitter are anticipating the revival of the Chinese coin narrative, given that Hong Kong is China’s special administrative region. Mainland China’s subtle support for Hong Kong’s pro-crypto stance might be a bullish indicator for the so-called Chinese tokens like Conflux (CFX) and Filecoin (FIL).