Hong Kong Should Speed Up Digital Asset Regulation to Avoid Falling Behind, Says First Digital Trust

Hong Kong-based stablecoin issuer First Digital Trust has urged the city to accelerate its regulation of the digital asset space, warning that it risks falling behind in the rapidly evolving industry.

While Hong Kong aims to become a global cryptocurrency hub, currently only two virtual asset trading platforms, Hash Blockchain and OSL Digital Securities, hold full licenses. Many other exchanges are still awaiting full operational licenses.

First Digital CEO Vincent Chok said in an interview that Hong Kong's current more conservative and gradual approach to trading regulation is understandable, as it prioritizes investor protection. However, he stated that he hopes to see regulatory acceleration to ensure Hong Kong does not lag behind the industry's pace of development.

First Digital Trust believes that Hong Kong is not yet ready to regulate US dollar-backed stablecoins, while Dubai has taken a more global approach. Chok expressed his anticipation for Hong Kong to introduce regulation for US dollar-backed stablecoins in the near future.

Furthermore, Chok does not believe banks will be eager to provide digital asset custody services, as this falls outside their risk tolerance. Many companies have already established trust structures to offer cryptocurrency custody services.