Hong Kong is about to introduce an OTC licensing system, with the potential to become a leader in the Asian cryptocurrency market. OSL Group’s CFO revealed in an interview today that the previously rumored OTC licensing system for cryptocurrencies may be launched in the short term. He is optimistic about Hong Kong becoming a leader in the Asian virtual asset market and believes that Security Token Offerings (STOs) may become a mainstream fundraising model in Hong Kong.
In addition to the virtual asset trading platform licensing system implemented last year, the Hong Kong government is now planning comprehensive regulations for over-the-counter (OTC) transactions, including the establishment of a licensing system under the customs department. This will require OTC businesses to implement Know Your Customer (KYC) verification to combat illegal cryptocurrency trading.
Following the public consultation on the OTC licensing system by the Hong Kong government in April, OSL Group’s CFO Hu Zhenbang revealed in an interview with Ta Kung Pao today that Hong Kong may introduce a licensing system for cryptocurrency OTC businesses in the near future. The government also plans to introduce different regulatory measures related to anti-money laundering and cybersecurity to promote market standardization and explore virtual asset policy-making.
Hu Zhenbang stated that Hong Kong has significant advantages in developing the virtual asset market, such as low tax rates, exemption from capital gains tax for cryptocurrency investments, clear legal system, and investor protection. Hong Kong is also an international financial hub, attracting financial elites from various countries, and with the support of China, it has the necessary conditions to become a leader in the Asian virtual asset market.
He emphasized that the characteristics of the virtual asset license in Hong Kong expand the market’s advantages. Currently, Hong Kong’s virtual asset license can provide trading services for both cryptocurrencies and Security Token Offerings (STOs), which is more convenient compared to Singapore and the United States. This flexibility is a major advantage for Hong Kong in developing STOs.
Hu Zhenbang also expressed confidence in the development potential of STOs in Hong Kong. He pointed out that issuing Security Token Offerings (STOs) in Hong Kong provides companies with a new fundraising option, increasing transparency and automation in the process, reducing costs and minimizing risks of errors.
While Hu Zhenbang is optimistic about Hong Kong’s development in the Web3 industry, as of last weekend, Hong Kong’s Bitcoin spot ETF only held 4,064 BTC, equivalent to approximately 282 million US dollars, which is significantly lower compared to the US market. Despite Hong Kong’s efforts to enhance regulatory measures, whether it can continue to attract funds and become the capital of Asian Web3 remains to be seen.