A new report released by the Hong Kong Stock Trade (HKEX) Oct. 18 proposes that economical systems (fintech), which includes cryptocurrencies and blockchain, really should be regulated in consistency with present regulatory frameworks.
The report, penned by the Main China Economist’s Place of work and Innovation Lab at HKEX, focuses on integrating and regulating blockchain and synthetic intelligence (AI) apps inside of the securities marketplace, fairly than in the fields of banking, World-wide-web finance and electronic currencies, which it notes is wherever they are at present “most” often deployed.
To this end, the report outlines the opportunity effects of equally systems for the capital sector and securities trading, singling out blockchain use conditions for “trading and clearing and settlement organizations, asset rehypothecation business enterprise and non-public equity sector.”
HKЕХ suggests that the disintermediated and distributed framework of blockchain is poised to enhance trade transparency and efficiency across the securities sector, as properly as to reduce prices.
Nonetheless, together with this good effects, the report highlights that the use of modern systems might “magnify or expose new varieties of economical danger.” To this end, it advises consistently “upgrading” regulatory frameworks to keep rate with disruption and prevent the emergence of “possible regulatory loopholes.”
In the situation of electronic currencies, HKEX notes that various interpretations of their significance have prompted various jurisdictions to set divergent regulatory targets for oversight of the sector.
All round, the report proposes that whether made available in a “virtual or real atmosphere […] economical organizations of the exact nature really should be issue to the exact regulation,” to “ensure truthful levels of competition and avert regulatory arbitrage.”
This is broadly described as the “consistency principle” in economical regulation, and the report particularly advises bringing electronic currency and electronic resources beneath the purview of the present securities regulatory framework:
“The general public fund-boosting pursuits of shares issuance by issuers – which do so with merely a prospectus released on the internet but with out any underwriter nor compliance with the IPO registration techniques or strict disclosure requirements – have to be rectified by subjecting them to the governance by the Securities Law.”
As reported in September, “insider sources” have recently suggested that HKEX is eyeing takeovers in the blockchain sector as component of a modify in business enterprise technique, reportedly prompted by stalling trading inbound links with exchanges in China amid worsening U.S.-China trade relations.