The Financial Services & the Treasury Bureau (FSTB) and the Securities & Futures Commission (SFC) today launched a joint public consultation on the legislative proposals for establishing licensing regimes for digital asset (DA) dealing and custodian service providers.

The public consultation will last until August 29.

Under the proposed licensing regime for DA dealing service providers, any person who carries on a business of providing DA dealing services in Hong Kong will have to be licensed by or registered with the SFC.

Also, irrespective of whether the relevant DA dealing services are provided through a physical outlet and/or other platforms, both simple dealing services and more complex services will fall under the scope of the licensing regime.

In addition, licensed or registered providers of DA dealing services will need to meet fit-and-proper criteria and comply with a range of regulatory requirements.

The licensing regime will be fully implemented on the date the relevant statutory provisions come into effect.

Meanwhile, under the proposed licensing regime for DA custodian service providers, any person carrying on a business in Hong Kong of providing DA custodian services will have to be licensed by or registered with the SFC.

Licensed or registered providers of DA custodian services will also need to meet fit-and-proper criteria and comply with a range of regulatory requirements.

Secretary for Financial Services & the Treasury Christopher Hui said the Government is striving to build Hong Kong into a premier global hub for DAs, adding that upholding investor protection is of utmost concern.

“The proposed licensing regimes will lay a solid foundation for us to establish a comprehensive regulatory framework for DAs with investor and customer protection at its core.

“The move will also help realise our vision to build Hong Kong's DA ecosystem into a highly trusted one that will flourish sustainably and responsibly in a risk-managed manner, thereby delivering concrete benefits to the real economy and financial markets.”

The public and stakeholders can submit their views by post to the FSTB at 24/F, Central Government Offices, 2 Tim Mei Avenue, Tamar, Hong Kong.

They can also send their views on the licensing regime for DA trading service providers or the licensing regime for DA custodian service providers by email.