China's Central Bank mentioned in the Financial Stability Report the global encryption currency regulation dynamics, specifically mentioning Hong Kong's exploration of a licensing system.

The People's Bank of China (Central Bank) recently released the China Financial Stability Report (2024), which focuses on the regulatory dynamics of cryptocurrencies in various countries and specifically mentions that Hong Kong is actively exploring a cryptocurrency licensing system. This is in stark contrast to China's strict policy of banning cryptocurrency trading, highlighting the policy divergence between China and Hong Kong in cryptocurrency regulation.

The Financial Stability Report of China (2024) released on December 28th mentioned that due to the potential systemic stability risks posed by Crypto Assets, regulatory authorities around the world are continuously strengthening their regulatory efforts on Crypto Assets. Currently, 51 jurisdictions globally have implemented bans or restrictions on Crypto Assets, and some economies have adjusted existing laws or enacted new regulations.

As early as September 2021, the Central Bank of China, in conjunction with multiple departments, issued a notice to completely ban cryptocurrency trading and mining activities within the country. However, in sharp contrast, Hong Kong has taken a completely different approach to the cryptocurrency field.

Starting from June 2023, Hong Kong officially launched the licensing system for Cryptocurrency trading platforms, allowing licensed platforms to provide trading services to retail investors. The report mentions that Hong Kong currently regulates encryption assets into two categories: 'securitized financial assets' and 'non-securitized financial assets'. Operators of encryption asset trading platforms in Hong Kong implement a unique 'dual licensing' system, where 'securitized tokens' are regulated and licensed under the 'Securities and Futures Ordinance', while 'non-securitized tokens' are regulated and licensed under the 'Anti-Money Laundering Ordinance'. Institutions engaged in virtual asset business must apply for registration licenses with the relevant regulatory authorities to operate.

Meanwhile, the Hong Kong government also requires large financial institutions such as HSBC and Standard Chartered Bank to include Crypto Assets exchanges in their daily customer supervision scope.

In addition, the Central Bank of China also pointed out in the report: 'The relationship between encryption assets activities and systemically important financial institutions, core financial markets, and market infrastructure is limited, but as the application scenarios of encryption assets in payments and retail investments increase, encryption assets may pose risks in some economies.'

To this end, the Financial Stability Board (FSB) and relevant standard-setting bodies have jointly developed a global regulatory framework for crypto assets, guiding regulatory authorities in addressing financial stability risks associated with crypto assets based on the principle of 'same activity, same risk, same regulation'.

The article 'China Central Bank's 'Financial Stability Report' mentions the global Crypto Assets regulatory dynamics, and specifically mentions Hong Kong's exploration of licensing system' was first published in 'Block Beat'.