Will Singapore’s early lead prevail as Hong Kong introduces crypto laws?

WHEN Hong Kong’s Legislative Council held the first and second reading of the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022 on Jul 6, it became the latest jurisdiction in Asia to regulate the activities of virtual asset service providers (VASPs), which include cryptocurrency exchanges and wallets.

This long-anticipated law is starting its legislative passage, following various consultations, guidelines and position papers from Hong Kong’s markets and monetary regulators on how institutional financial services firms can participate in cryptocurrency investments and transactions.

While the goals of Singapore and Hong Kong’s cryptocurrency regulations are similar, each has taken a different path. With its landmark Payment Services Act, Singapore not only created a regulatory framework for cryptocurrencies but a whole range of fintech services. Singapore likely took this approach in response to a growing ecosystem of start-ups and innovative firms delivering new ways to pay, transact, reward, and invest in recent years.