Hong Kong's leap into crypto gets a new push

Fintech innovation is seen as a way to shrug off the ennui weighing on traditional sectors like retail and property.

- Andy Mukherjee

If the choice of acronym is a signal of intent, then Hong Kong is set to make a splash in the world of cryptocurrencies.

After all, the framework it adopted in June is called "Leap", and Chief Executive John Lee's policy address on Sept 17 gave a good indication of its landing point: a financial centre for institutions, wealthy family offices and the wider public to safely store and trade virtual assets.

The “L” in Leap stands for legal streamlining. Hong Kong has been chipping away at it since 2018, though the process picked up momentum three years ago. Around the same time that Singapore was retreating from its retail crypto push and Sam Bankman-Fried’s FTX empire was days away from imploding, the city took the bet that virtual assets were here to stay. Mr Lee’s administration changed the money-laundering law to enable regulation of crypto exchanges. It doubled down in August with a licensing regime for stablecoins, virtual tokens pegged 1:1 to fiat currencies.