Ren Zhigang, the former president of the Hong Kong Monetary Authority, has expressed concerns about the government’s involvement in promoting virtual assets. Hong Kong is moving towards becoming a haven for crypto companies, even though there is still a lot of regulatory work to be done.

The steps towards crypto-friendliness doesn’t seem to have gone down well with the jurisdiction’s former chief financial regulator. He has been critical of the move of the government of the city. He likened investing in virtual assets solely based on their rising prices to entering a casino. This statement suggests that he is critical of the speculative nature of virtual asset investments.

Just like entering the casino

According to him,

“If (investors) buy because of the rising price of virtual assets, they might as well enter the casino.” 

In response to Ren Zhigang’s comments, the Hong Kong government has stated that their active promotion of virtual assets aligns with their vision of being a comprehensive financial center. However, they also acknowledge the need for regulation in this area. As a result, they have announced plans to introduce stablecoin regulation by next year.

More regulatory policies scheduled by the regulators

Stablecoins are a type of cryptocurrency that aims to maintain a stable value by being pegged to a reserve asset, such as a fiat currency like the US dollar. The introduction of stablecoin regulation indicates that the Hong Kong government recognizes the importance of providing a regulatory framework for virtual assets to ensure stability and protect investors.

Hong Kong has been active in streamlining crypto themed investments in recent months. This is a time when regulators from several countries such as the US, Canada, Australia and Belgium are moving against cryptocurrency exchanges operating in their jurisdictions.