There were some reports that the authorities in Hong Kong were mulling for a legislation that was going to regulate or ban Bitcoin activities; however, a senior Hong Kong official has indicated that the government does not see a need for legislation. The statement by Secretary for Financial Services and the Treasury Professor KC Chan is encouraging the stakeholders.
The statement came in response to a question submitted during a meeting of the Legislative Council of Hong Kong by council member Leung Yiu-chung wherein he requested an update on the investigation into the MyCoin Bitcoin investment scam as well as clarity on whether officials intend to regulate Bitcoin activities more actively.
In the press release from the Hong Kong government it has come to the public that Professor Chan describes Bitcoin as limited in scope. The professor is of the view that Bitcoin does not pose a substantial threat to Hong Kong’s financial system given its current lack of widespread adoption in the region.
Government Does Not Feel the Necessity for Bitcoin Regulation
In the statement issued by Professor Chan it has become clear that the Government does not consider it necessary to introduce at the moment new legislation to regulate trading in such virtual commodities or prohibit people from participating in such activities. Also, should the need arise, Hong Kong regulators can draw from existing legal statutes.
There are existing legal provisions both domestic and international that deal with instances of fraud or criminal activities that involve digital currencies and can pretty well be used for handling Bitcoin activities. He says that the police will take enforcement action if they find information which involves criminal conduct.
The Government is though having Close Watch on Bitcoin
Professor Chan also suggested that his office and others will continue to watch developments in the Bitcoin space. He informed the media that he has outlined how financial institutions in Hong Kong are subject to strict reporting requirements when establishing or maintaining business relationships with customers or clients who are operators of any schemes or businesses relating to virtual commodities.
He concluded that the Government and financial regulators will keep a close watch on the development of Bitcoin and other virtual commodities, and maintain contacts with their counterparts in other places through active participation in meetings of the relevant international organizations such as the Financial Action Task Force.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org