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Hong Kong is one of those regions which remains pretty quiet on the cryptocurrency front. Although there is some interest in Bitcoin, no radical decisions are made by the government so far. It seems local officials are somewhat content to ignore this trend for the time being. Instead, they are looking forward to embracing blockchain technology. An interesting stance, although it could hurt the country’s reputation in the long run.
Granted, Hong Kong isn’t in the best of positions when it comes to cryptocurrency and blockchain. Both technologies pose big opportunities, but even bigger risks to the local economy. Fintech is a big trend in the country, but it all revolves around traditional solutions in a modern jacket. When it comes to cryptocurrencies, there is no policy or regulation to speak of. This means the region is well behind the curve compared to other Asian countries. Now is a good time to turn this ship around, assuming the government wants to take a few risks.
For a region with such a focus on fintech, one would expect a cryptocurrency policy as well. That has not been the case so far, which is somewhat disappointing. It is true the government pays close attention to blockchain. However, that is only the first step toward a proper fintech initiative these days. Cryptocurrencies can no longer be ignored and they will not disappear into obscurity either. Moreover, the country’s reliance on global and regional banks is a problematic factor. Cryptocurrencies will challenge the position of these banks sooner or later. When that happens, Hong Kong will be ill-prepared for what the future may bring.
There are other reasons why the country needs to step up its game. Hong Kong needs to find ways to promote Bitcoin usage and acceptance. Cross-border transactions at low fees and without scrutiny can be quite beneficial to any economy. Moreover, China has been heavily involved in cryptocurrency for some time now. Most of the mining pools are registered in the country and the PBoC is actively contributing to a regulatory ecosystem for Bitcoin. Hong Kong’s efforts in this regard are virtually non-existent so far.
Whether or not the local government will enact cryptocurrency legislation, remains a big mystery. There is no effort to indicate anything will change in this regard. That is surprising and disappointing, to say the least. Exploring the opportunities provided by cryptocurrencies should be a top priority right now. Alternative forms of payment such as Bitcoin will only gain more traction in the future. No one wants to be left behind in this regard, that much is certain. However, it is up to regions such as Hong Kong to actively pursue the possibilities ahead.
Image from Telegraph.co.uk