Julia Leung, CEO of Hong Kong’s Securities and Futures Commission (SFC), has called for more harmonisation of crypto standards, as a fragmented global crypto regulatory landscape is “not helping the industry”.
“This fragmentation in regulation, as well as liquidity, is actually not helping the industry, because it will add to the compliance costs,” Leung said during a panel discussion at a crypto industry flagship event, Consensus Hong Kong 2025, on Tuesday. “For regulators, the efficiency of price discovery is not there. You have a very fragmented liquidity pool,” she added.
Leung’s comments comes over two years after the special administrative region (SAR) of China announced its vision and approach for developing Hong Kong’s virtual asset industry in October 2022, at a time when the crypto industry was reeling from the spectacular fall of crypto exchange FTX.
With digital asset exchange Bullish receiving approval to operate a crypto trading platform in Hong Kong on Tuesday evening, the city has doled out a total of 10 licences since the draft rules were first proposed in February 2023.
The licensing regime for crypto trading platforms was followed by series of regulatory moves and government initiatives, including the launch of the first tokenised green bond in February 2023; the approval of spot virtual asset exchange-traded funds (ETFs) in April 2024; and most recently, the stablecoin licensing regime that was introduced into the Legislative Council for the first reading on December 18, 2024.
The city’s efforts to become a crypto hub is in contrast to those of mainland China, which declared all crypto-related activities illegal in 2021. Hong Kong has often been compared with other crypto hubs such as Singapore and the US.
But Leung highlighted that the global crypto regulatory landscape remains “very polarised”. “…if you look at the degree of intensity of regulatory scrutiny, [it] actually spreads all over the spectrum from light-touch to prohibition in the case of China,” she said.
“And in between that, you have Hong Kong, Singapore, and the US, which is also suffering despite the capital flows and the products that they are offering. They’re [The US] also suffering from fragmentation in oversight,” she added. What makes Hong Kong stand out is the city’s track record of “consistent clarity and certainty” and investor protection-focused in its regulation approach, Leung said.
Most recently, the US Securities and Exchange Commission (SEC) launched a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets on January 21. The new task force marks the first major step taken by US President Donald Trump’s new administration, who earlier campaigned to make US the ‘crypto capital of the planet’.
