At a time when the popularity of cryptocurrencies is rapidly increasing, it is facing a major roadblock when it comes to the mainstream. It has been a year since Hong Kong took a systematic approach to invest in cryptocurrency assets. A policy framework was launched for trading in crypto, but only a few fund managers have been approved until now. It sums up the difficulties cryptos face while aiming to be an alternative currency.
In 2018, Hong Kong’s Securities and Futures Commission (SFC) introduced a license for fund managers for digital assets to sell to customers. However, only a hand full of investors has been approved in a year. Debates have been going on for quite some time among financial regulatory bodies regarding a global policy for regulating cryptos and how to safeguard investors from digital scams. Nonetheless, the turnout of the initiative taken by the Hong Kong government is disappointing in that sense.
As per reports, Diginex, a Hong Kong-based cryptocurrency operator, is an only firm whose license has been approved. When asked for comments, Diginex’s CEO, Richard Byworth, said,
“We believe it is vital to be regulated to build trust not only with our clients but also in the industry.”
The firm was approved in June this year.
According to experts, several factors lead to this disappointing result. Some of them include staying away from big firms from applying, the expectation of government for firms to be a traditional fund manager, the volatility of crypto assets, the relative infancy of the sector, audit, cybersecurity, and other operational necessities. One needs to understand that the crypto space is relatively fresh and lacks experienced players. The lack of stability in the space can only be eliminated once it becomes regulated.