• Hong Kong’s SFC now permits licensed crypto exchanges to attach with affiliated world platforms to share order books with the intention to enhance market liquidity and competitiveness.
  • The brand new framework permits routing or consolidating orders with world books and relaxes itemizing guidelines for stablecoins and sure tokens provided to skilled buyers.
  • This technique is a part of Hong Kong’s push to construct a sustainable digital asset ecosystem.

Hong Kong’s Securities and Futures Fee (SFC) will enable licensed crypto exchanges to hook up with world liquidity by sharing order books with affiliated abroad platforms, topic to prior written SFC approval. 

The change is aimed toward deeper liquidity and tighter spreads as town pushes its digital asset technique, which features a current approval of the world’s first Solana (SOL) spot exchange-traded fund (ETF).

Associated: WEF President Warns of Potential AI and Crypto Bubbles Amid $500B Tech Investment Surge.

Boosting Competitiveness 

In circulars published Monday, the regulator stated accredited integrations would enable Hong Kong buyers to entry broader markets for higher value discovery. 

SFC Chief Govt Officer Julia Leung, in remarks launched alongside the coverage, stated the aim is to spice up competitiveness whereas sustaining safeguards.

In constructing a sustainable digital asset ecosystem, she pinpointed that success is about enhancing the robustness of our monetary infrastructure, clearing and settlement by way of blockchain. Additionally it is about scaling and the sustainable development of the digital asset market. A vibrant digital asset market requires a various vary of services to draw several types of buyers, in addition to energetic market makers to supply liquidity.

SFC

The transfer departs from the present mannequin that depends on prefunded accounts and home settlement, which may fragment liquidity. Below the brand new method, SFC-licensed venues might route orders to or consolidate with world books as soon as they meet supervisory circumstances.

A second circular relaxes itemizing standards for sure property: tokens and stablecoins authorised or supervised by the Hong Kong Financial Authority might be exempt from the same old 12-month trading-history requirement when provided to skilled buyers. The exemption is meant to widen accessible merchandise with out compromising oversight.

All in all, Hong Kong is refining its frameworks for trade and stablecoin licensing amid competitors from different jurisdictions. Leung couldn’t have summarised it higher by stating that guidelines should strike a steadiness. 

In different phrases, too strict and liquidity and expertise strikes elsewhere, too free and belief erodes. However it appears issues are a bit completely different with regards to stablecoins; the Folks’s Financial institution of China (PBoC) lately requested Chinese language tech companies Ant Group and JD.com to halt the issuance of stablecoins in Hong Kong.

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