According to a piece published by the Hong Kong SCMP Editorial, the area took a blow after the failure of several of the world’s most prominent bitcoin exchanges. The post opened up by quoting the region’s Finance Secretary Paul Chan Mo-po:In light of the cryptocurrency industry’s crisis, insiders can no longer claim they are above regulation or that governments just don’t ‘get it’. The hype has turned out to be just like any other financial manias of the past.

Paul Chan Mo-po has said that virtual assets and cryptocurrencies are “unstoppable,” notwithstanding the debacle that occurred with the FTX. The city is consequently keen to catch up with Singapore in terms of the advancements that have been made in the financial sector.

Although Chan said that the government intended to embrace virtual assets, there has to be clear definitions to differentiate between the digitalized versions of equities, bonds, exchange-traded funds, and other financial instruments that are already regulated. Plus newfangled blockchain-based assets such as non-fungible tokens (NFTs), Bitcoin, and other digital tokens that are not yet regulated by any authorities. There must be appropriate regulation because of the threats they pose to the stability of the financial system, protection of consumers, money laundering, and funding of terrorist organizations.

The new law will license virtual asset service companies starting June 1, 2023, and it would subject crypto exchanges to the same regulations as conventional banks.