Hong Kong is currently working around its crypto laws
The HKMA is looking to foster blockchain exploration
Hong Kong has set up a subcommittee to oversee crypto rules drafting
The HKMA announced this incubator during HKMA’s FiNETech4 event
Photo Credit: Unsplash/ Annie Spratt
The Hong Kong Monetary Authority (HKMA) has established a ‘Supervisory Incubator' that will help banks develop and test the use cases of the distributed ledger technology (DLT). The initiative was announced on Wednesday, during the FiNETech4 event organised by the HKMA. The emergence of Web3 and its potential offerings to the global financial services was among the subjects of discussions in the event. The newly formed body will focus on helping banks try risk management capabilities around deposits and loan services. The practice of tokenised deposits will be the core area of focus for the incubator, the HKMA said.
The HKMA announced the creation of the new incubator in the presence of over 300 professionals from the banking, insurance, and provident fund sectors.
Commenting on the launch, HKMA's Deputy Chief Executive, Arthur Yuen said, “The Supervisory Incubator for DLT is a key component of our strategy to foster the development of DLT-based banking solutions that are safe, efficient, and beneficial to the industry and the wider community.”
Hong Kong's banks will effectively have a direct line of communication with regulators via this platform. The incubator will give banks quick access to a team of HKMA officials, for feedback on the risk management solutions they develop before a wider launch.
The platform has also been tasked with promote industry-wide awareness around blockchain-based risk management solutions. Initiatives such as industry sharing sessions and inception of futuristic research projects will also be introduced under the incubator's oversight.
Hong Kong emerged as the most ‘crypto ready' region, in Forex Suggest's ‘Worldwide Crypto Readiness Report'. Presently, Hong Kong does not have a comprehensive set of guidelines to govern its crypto sector. The trading, purchasing, and holding of cryptocurrencies is not prohibited.
Last April, Hong Kong approved Bitcoin and Ether spot ETFs in a landmark decision that allowed traders of traditional stocks to experimenting with crypto trading without having to directly engage with the infamously volatile assets.
A feew months later, Hong Kong also established a new subcommittee, dedicated to drafting detailed crypto laws.
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