In its recently released 2024 Financial Stability report, the People's Bank of China (PBOC) underscored the importance of regulating crypto activities amidst ongoing global efforts.
In its recently released 2024 Financial Stability report, the People's Bank of China (PBOC) underscored the importance of regulating crypto activities amidst ongoing global efforts. The report, published on Friday, included a section specifically addressing the regulatory landscape for cryptocurrencies and detailed Hong Kong's burgeoning crypto licensing regime.
The PBOC noted that 51 jurisdictions worldwide have imposed bans or restrictions on cryptocurrency assets. This includes mainland China, where a blanket ban on all crypto trading and mining was implemented in September 2021.
In contrast, Hong Kong has adopted a different approach, actively welcoming crypto firms. As of June 2023, the region has officially launched a licensing regime for crypto trading platforms, permitting licensed exchanges to provide retail trading services.
The report also highlighted that major financial institutions, including HSBC and Standard Chartered Bank, are now required to monitor crypto transactions as part of their standard customer supervision protocols.
This move signifies a shift in regulatory practices within Hong Kong, which aims to integrate cryptocurrencies into the existing financial framework.
Additionally, the PBOC is committed to enhancing an international regulatory framework for crypto assets, as suggested by the Financial Stability Board.
While the central bank acknowledged that the connections between crypto activities and systemically important financial institutions may be limited, it warned that crypto could pose risks in certain economies, particularly as their use in payment systems and retail investments expands.
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