Hong Kong Stock Exchange Put Forward Framework for Crypto regulation
The Hong Kong Stock Exchange (HKEX) are of the view that legal frameworks around finance and cryptos should be the same to help enhance Crypto regulation .
The stock exchange in its research looks at the need for regulators to keep up with the pace of financial technologies. In the event of any delay, the existing laws of finance should be applicable to the companies in the FinTech space, based on their resemblance with the traditional services.
It is opined that Blockchain could be brought inside the space of investment, trading, clearing, and settlement. Also issuing digital assets on blockchain could be governed by an existing securities regulatory framework.
“Despite the difference in Fintech regulations among countries,” HKEX added, “the principle of consistency generally applies, i.e. financial services with the same nature are subject to the same regulations under the existing legal framework, so as to maintain fair competition, ensure regulatory effectiveness and prevent regulatory arbitrage.”
Crypto advancements can enhance a framework as much as it can hurt it. The HKEX paper takes occurrences from different nations and their blockchain testing labs. Known as “supervisory sandbox testing,” the procedure intends to limit hazards by conveying blockchain and crypto advancement among a secretly administered system of clients with insignificant adaption prerequisites and administrative limitations. A full-scale organization follows simply after the crypto item passes on the usefulness, the security, and the administrative front.
Taking note of that supervisory sandbox hones are just constrained to the saving money divisions in its current organization, the HKEX report prescribes that these testing models ought to be stretched out to non-banking sectors , for example, blockchain and cryptos also. An excerpt reads:
“Given that Fintech Supervisory Sandbox (FSS) is timely and flexible in making a regulatory response to market innovations, it can encourage Fintech innovations and minimize the negative impact of regulatory uncertainties with effective risk prevention and control. It is, therefore, the most suitable regulatory tool for Fintech.”
Crypto regulation has been an issue facing the Cryptocurrency sector from the onset.