The Hong Kong Bitcoin Association disagrees with the wave of cryptocurrency regulations in the city and warns that they could harm innovation and financial inclusion in the city.
Hong Kong may be over-regulating cryptocurrencies
Hong Kong Bitcoin Association has criticized the city's plan to regulate cryptocurrencies. The association is calling on regulators to reconsider the potential impact of their move on the city's digital future.
In November The Hong Kong government has announced a major change in the way the city interacts with cryptocurrencies. The proposal aims to banning the retail use of cryptocurrencies and is part of Hong Kong's crackdown on money laundering and terrorist financing.
According to a Financial Services and Treasury Bureau consultation paper, regulations will also cover the city's bitcoin ATM network. Hong Kong currently operates a total of 62 bitcoin ATMs, CoinAtmRadar data shows.
Leo Weese, co-founder of the Hong Kong Bitcoin Association, recently spoke to the South China Morning Post about the city's regulations. According to him, restricting retailers from using and accessing bitcoin would undermine Hong Kong's goals of promoting digital innovation and financial inclusion.
Mr Weese also warned that extended surveillance has created uncertainty for start-ups and their investments.
The regulatory scheme would be a significant expansion of Hong Kong's existing cryptocurrency licensing architecture. Currently, the city only requires registration of cryptocurrency exchanges and futures products.
echoing across mainland China
City's tightening approach to cryptocurrencies reminds approach used in mainland Chinawhere trading in cryptocurrencies is completely prohibited. Hong Kong is currently one of the largest cryptocurrency trading hubs. A wave of regulation and severe penalties, including the possibility of jail time for corporate executives, has put the industry on edge .
China has also taken a tougher approach to gambling this year, including a recent crackdown that resulted in more than 60,000 arrests, or the recent decision to completely ban TripAdvisor and 150 other apps over gambling concerns.
The country's relationship with gambling is complex and not a new phenomenon. China has for years are fighting gambling-related capital outflows and recently announced plans to stem the massive outflow of $146 billion by imposing much tougher penalties. However, the move would benefit Macau's special administrative region and help the gambling hub recover from the huge losses it suffered due to this year's blockade.