- China’s 2024 report highlights growing global regulatory pressure on crypto assets and their potential risks.
- Hong Kong is exploring crypto license management to align with global regulatory trends and increase compliance.
- Countries are adjusting crypto laws with stricter oversight following market volatility and systemic risks.
The People’s Bank of China (PBoC) has released the China Financial Stability Report 2024. The report sheds light on global cryptocurrency regulatory trends. The report emphasizes the proactive approach taken by Hong Kong to managing crypto asset licenses.
Regulators in Hong Kong categorize virtual assets as securitized or non-securitized financial assets, applying a dual license system. Platforms offering security tokens fall under the Securities and Futures Ordinance, while non-security tokens adhere to the Anti-Money Laundering Ordinance. Large financial institutions like HSBC and Standard Chartered must also include crypto exchanges in their daily monitoring protocols.
Global Crypto Market Sees Regulatory Shifts
The report notes that 51 countries and regions have imposed prohibitions on crypto assets. However, some economies are revising or re-legislating their regulations. In the United States, the Securities and Exchange Commission (SEC) has tightened scrutiny. The regulatory body has rejected multiple Bitcoin ETF applications between 2018 and 2023. However, a spot Bitcoin ETF was approved in early 2024.
The European Union has taken a structured approach by approving the Crypto-Asset Market Regulation Act. This framework, set for implementation by the end of 2024, aims to standardize virtual asset regulations across member states. Meanwhile, the United Kingdom has integrated crypto assets into its Financial Services and Markets Act, broadening its regulatory scope.
Singapore recently introduced a Stablecoin Regulatory Framework. The regulation specifies conditions for issuers and defines the scope of regulated stablecoins. Similarly, Japan’s Funds Settlement Act limits stablecoin issuance to licensed financial entities.
FSB’s Global Standards for Oversight
The Financial Stability Board (FSB) has also been instrumental in developing an international regulatory framework for crypto assets. Released in 2023, the framework promotes principles such as same business, same risk, same regulation. It encourages economies to apply existing financial laws to crypto or create new ones.
The roadmap developed by the FSB and the International Monetary Fund (IMF) outlines steps to address macroeconomic and financial stability risks. Their collaborative approach seeks to close data gaps, enhance global cooperation, and standardize regulations.
The report concludes that while crypto activities currently have limited links to systemically important financial institutions, their growing use in retail investment could pose risks. Regulatory consistency remains a priority as global financial systems adapt to the evolving crypto landscape.
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