In summary
- Hong Kong is preparing to introduce a policy at the end of the year that seeks to extend tax incentives to family offices and private funds that invest in cryptocurrencies on behalf of wealthy clients.
- Christopher Hui, Hong Kong’s Treasury and Financial Services Secretary, said the region wants to ensure it has the “right enabling environment for Blockchain, particularly its financial applications.”
- The upcoming policy aims to support Cryptocurrency development and investment in regulated products, as the region attempts to become a global digital asset hub.
Hong Kong is preparing to introduce a policy at the end of the year that seeks to extend tax incentives to family offices and private funds that invest in cryptocurrencies on behalf of wealthy clients.
Christopher Hui, Hong Kong’s Treasury and Financial Services Secretary, said the Chinese Special Administrative Region wants to ensure it has the “right enabling environment for blockchain, particularly its financial applications.”
“We get asked all the time…what are the incentives…from the government in terms of growing this sector?” Hui said on Sunday during a keynote speech at Hong Kong FinTech Week.
Hong Kong already offers tax incentives for certain privately offered funds and family investment vehicles, as long as they meet specific requirements and invest in designated areas.
That includes an exemption from profits tax at a standard rate of 16.5%, while interest earned for private equity managers is taxed at 0%. Additionally, certain transactions may benefit from stamp duty exemption.
The upcoming policy aims to support cryptocurrency development and investment in regulated products, as the region attempts to become a global digital asset hub. The news of Hong Kong’s move to regulate virtual asset trading, which began two years ago with a pilot program under the Securities and Exchange Commission, laid the groundwork for a formal licensing regime.
The Virtual Asset Trading Platform (VATP) regime, implemented in June 2023, aims to improve protections for investors and strengthen compliance standards for digital asset platforms.
To advance that specific policy, Hui said the government will introduce a stablecoin policy on the “product front” by the end of the year.
Under the new framework, foreign issuers of stablecoins referenced to fiat currencies would be required to establish a physical base in Hong Kong, hold reserves in local banks, and would be prohibited from offering interest payments to holders, Decrypt previously reported.
As for the service, Hong Kong will begin regulating custodians by “designing the appropriate regime” next year, while consulting market players on over-the-counter cryptocurrency trading, Hui said.
Exactly how he intends to do this remains unclear. The SFC did not immediately respond to Decrypt’s request for comment.
“By embracing a broader scope of utility regulation, we will be able to grow this market even further,” he said.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
Disclaimer: Please note that the information provided on this page is for News purposes only and should not be considered investment or trading advice. ©Crypto.keynoteusa.com strongly recommends that you conduct independent research and/or consult with a qualified professional before making any investment decisions.