It’s hardly a secret that though China officially banned bitcoin mining in 2021 and cracked down on cryptocurrencies, Chinese investors have continued to find ways to participate.

So does the license approval this past week of retail crypto trading in Hong Kong, via HashKey exchange, signal some easing of China’s policy?

It would seem so, at least in the important finance hub.

The exchange announced the news via a press statement, which fulfilled a goal it set earlier this year:

“As an existing Type 1 and Type 7 licenses holder, HashKey Exchange successfully underwent a simplified process to obtain the license upgrade … to expand its business scope from serving professional investors to retail users, fulfilling market demand for a licensed platform that offers users a safer and simpler process for buying and storing cryptocurrencies.”

The offering is actually a joint venture of Hashkey and OSL Digital Securities, Ltd, a subsidiary of Hong Kong’s BC Technology Group Ltd.

The press release noted that the exchange would offer Bitcoin and Ethereum trading to registered users, and said the two largest market cap cryptos were a “start,” implying other cryptos would eventually be made available.

A July Bloomberg article (via The Washington Post) reported that Hong Kong’s crypto moves could not be happening without “quiet” support from Beijing. (“Why Hong Kong Wants to Be a Hub for the Crypto Sector,” 5 Jul 2023.)

Hong Kong has opened the door back to the crypto sector in a bid to attract fresh tech talent and capital back to the city, following lean years precipitated by harsh mainland political crackdowns, and damaging COVID lockdown measures.

Before China embarked on a widespread crypto crackdown as the sector surged in 2021, Hong Kong had been a leading crypto hub, with exchanges including Crypto.com and FTX founded there.

The city has nonetheless tried to maintain some economic independence, and Hashkey and OSL have been two companies that previously adopted Hong Kong’s investor level licensing regulatory regime.

TRENDPOST: Trends In Cryptos has forecast regions which suppressed crypto innovation would hurt themselves. Young talent and energy are with the sector, and the kinds of innovations the sector is focused on realizing.

Beijing allowing Hong Kong to officially offer Bitcoin and Ethereum investing to its citizens at a retail level once more, is a modest easing. Just as importantly, many Chinese have bucked authorities and invested in cryptos despite prohibitions.

But the new approval is a sign, along with others, that more regions are not only coming to terms and regulating decentralized crypto technology, but vying to participate in the rewards surrounding its continued development.

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