Central Bank reports on the global Cryptocurrency regulatory dynamics and the Hong Kong Cryptocurrency licensing system follow

On December 30, the People's Bank of China recently released the "China Financial Stability Report (2024)", which focuses on the global efforts in regulating Crypto Assets and outlines the Cryptocurrency licensing system in Hong Kong. The report states that regulatory authorities around the world continue to enhance the regulation of encryption assets. In view of the potential spillover risks of encryption assets to the stability of the financial system, regulatory authorities worldwide continue to strengthen the regulation of encryption assets. Currently, 51 countries and regions globally have imposed prohibitions on encryption assets, and some economies have adjusted existing laws or enacted new legislation. In the United States, based on existing regulatory laws, the Securities and Exchange Commission (SEC) regulates the misconduct of encryption asset issuers under the Securities Act. The SEC rejected more than 20 applications for Spot BTC ETFs from 2018 to 2023. After approving the listing of BTC Spot ETF in January 2024, the SEC chairman stated that this does not mean that the SEC approves or endorses BTC products, and investors should still be cautious about the risks associated with BTC and products linked to encryption assets. The EU has approved the "Crypto Assets Market Regulation Act", establishing the world's first comprehensive and clear framework for the regulation of virtual assets. The Act is planned to be formally implemented by the end of 2024. The UK has accelerated the legislative process for virtual assets and issued the "Financial Services and Markets Act", bringing encryption assets under the scope of regulation. Singapore has released the "Stable Coin Regulatory Framework", specifying the scope of regulated Stable Coins and issuer requirements. Japan has formulated the "Funds Settlement Act", restricting the issuance of Stable Coins to licensed banks, registered transfer agents, and trust companies. Hong Kong, China categorizes virtual assets into two types for regulation, namely securitized financial assets and non-securitized financial assets. The operators of virtual asset trading platforms are subject to a special "dual licensing" system, where "security-type Tokens" are subject to regulation under the "Securities and Futures Ordinance" and licensing system, while "non-security-type Tokens" are subject to regulation under the "Anti-Money Laundering Ordinance" and licensing system. Institutions engaged in virtual asset business must apply for a registration license from the relevant regulatory authorities before operating. At the same time, large financial institutions such as HSBC and Standard Chartered Bank are required to include encryption asset exchanges in their routine customer supervision.