The number of cryptocurrency exchanges seeking operational licenses in Hong Kong is steadily decreasing as the deadline approaches. Most recently, three crypto exchanges withdrew their license applications filed with the Securities and Futures Commission of Hong Kong (SFC).
On May 13, crypto exchanges IBTCEX and QuanXLab withdrew their applications, initially filed in February 2024. The next day, Huobi HK, a crypto exchange with links to HTX, also withdrew its application.
According to the SFC, seven crypto exchanges have withdrawn their Hong Kong license applications in 2024. The reasons behind these withdrawals were not disclosed on the SFC’s website. All cryptocurrency exchanges that have not applied for a license must cease operations in Hong Kong by May 31.
Currently, 21 crypto exchanges are lined up for a Hong Kong’s VATP licence, including global players such as Bybit, Crypto.com, Matrixport HK, HKX, and OKX. The most recent application was submitted by Bitcoin World Technology Limited on behalf of the “bitcoinworld” crypto exchange on May 17.
Under Hong Kong’s new virtual asset regime, the SFC may issue a notice to a firm if it does not qualify for a “deeming arrangement,” which allows a platform to be considered licensed from June 1 while it awaits full approval. Firms that do not qualify must shut down by May 31 or within three months of being notified by the SFC, whichever is later.
Hong Kong adopts digital yuan
The Hong Kong Monetary Authority (HKMA) recently launched a pilot program for the digital yuan (e-CNY), marking the first deployment of the central bank digital currency (CBDC) outside of mainland China.
Hong Kong residents now only need their mobile phone number to create an e-CNY wallet, which can enable cross-border payments but is currently not available for person-to-person transactions. The pilot program will allow residents to conduct transactions from their digital yuan wallets, which can be topped up through 17 retail banks using the Faster Payment System (FPS).
Eddie Yue, the chief executive of the HKMA, stated that the e-CNY application and wallet will gradually gain more functionality as the HKMA and the People’s Bank of China (PBoC) work on facilitating more retail merchant adoption.
