Global Crypto Regulations Discussed by the People's Bank of China, Highlighting Hong Kong Crypto Asset License Management and New Regulation

The People's Bank of China has released its “China Financial Stability Report 2024.” The report discusses the global regulation of cryptocurrencies.

People’s Bank of China Discusses Global Crypto Regulations

The People’s Bank of China (PBOC) has released its “China Financial Stability Report 2024.” The report discusses the global regulation of cryptocurrencies, highlighting Hong Kong's research into ways to manage cyber asset licenses.

According to the report, 51 countries have banned cryptocurrencies, while some have changed their laws to better regulate them. The report also notes that the crypto market faced several challenges in 2022, but prices and trading volume rebounded in 2023.

In 2023, the total crypto assets market value reached $1.55 trillion, a 10.71% increase from the previous year. Due to the inherent risks associated with cryptocurrencies, many countries are tightening regulations.

For instance, in the United States, crypto issuers have been coming under the scanner of the Securities and Exchange Commission (SEC). The SEC rejected several Bitcoin ETFs from 2018 to 2023. Finally, SEC approval was granted for a Bitcoin spot ETF in January 2024.

However, the SEC noted that this approval does not indicate that the SEC considers Bitcoin to be a safe investment.

Hong Kong’s Dual Licensing System for Crypto Businesses

The European Union has enacted the Crypto-Asset Market Regulation Act to establish a comprehensive regulatory framework for virtual assets, set to be fully implemented by the end of 2024.

In the United Kingdom, the law has been amended to bring crypto assets under the Financial Services and Markets Act.

In Hong Kong, a “dual license” system has been developed for crypto businesses, distinguishing between ‘security tokens’ and ‘non-security tokens’ and subjecting them to different regulations.

Major financial institutions, such as HSBC and Standard Chartered Bank, are also required to oversee crypto exchanges.

The Financial Stability Board (FSB) has created a global regulatory framework for crypto assets to minimize disparities in financial risks across jurisdictions and enhance their convergence.

Governments are taking steps to ensure adequate market regulation as the popularity of cryptocurrencies continues to rise, bringing inherent risks that could threaten the stability of the global financial system.