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Julia Leung, chief executive of the Hong Kong Securities and Futures Commission (SFC), has recognized bitcoin’s resilience and staying power as an alternative asset, despite ongoing debates about its intrinsic value.
Speaking at the Greenwich Economic Forum Hong Kong on Wednesday, Leung acknowledged that while most central bankers and economists argue that virtual assets like bitcoin and ether lack intrinsic value, Bitcoin has survived multiple boom and bust cycles over the past 15 years, demonstrating its durability.
Leung’s comments come as the SFC’s licensing regime for crypto trading platforms officially commenced, requiring all exchanges serving retail investors in Hong Kong to obtain a license. However, Hong Kong lawmaker Duncan Chiu has criticized the “excessively stringent” regulations, arguing that they have deterred major global exchanges from entering the market and dampened investor confidence.
“Bitcoin has survived multiple cycles of boom and bust, clearly showing its staying power as an alternative asset […] its underlying technology — DLT — is here to stay,” Leung said.
While supporting the development of the Web3 ecosystem in Hong Kong, Leung emphasized that this should not be interpreted as an endorsement of virtual assets, which she described as highly speculative and prone to extreme price volatility. The SFC has implemented extensive safeguards to protect investors while meeting their demand for these assets.
In addition to the licensing regime for crypto exchanges, the SFC is working on regulating stablecoins. The Hong Kong Monetary Authority (HKMA) recently completed a consultation on a proposed regime that would require stablecoin issuers to ensure full backing by high-quality and high-liquidity reserve assets.
On May 23, Crypto Briefing reported that the regulator is considering staking for Ethereum ETFs, which it approved a month beforehand, although both Bitcoin and Ethereum ETFs saw sharp outflows in its domestic market two weeks post launch.
Notably, the Hong Kong SFC is also participating in Project Ensemble, a tokenization initiative launched by the HKMA in March to explore the potential of a central bank digital currency. The project will initially focus on tokenized deposits and establish a sandbox to pilot tokenization use cases, such as trading and settlement of tokenized products like green bonds and carbon credits.
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