Hong Kong’s SFC chief praises Bitcoin

Hong Kong’s Securities and Futures Commission chief Julia Leung says Bitcoin is clearly showing its power to stay as an “alternative asset.”

Bitcoin, the largest crypto by market capitalization, is here to stay as it succeeded over the past 15 years to survive multiple cycles of “boom and bust,” Hong Kong’s Securities and Futures Commission (SFC) chief Julia Leung says.

Speaking at the Greenwich Economic Forum, the SFC boss Leung acknowledged the prevailing skepticism among central bankers and economists regarding the intrinsic value of cryptocurrencies.

Yet, Leung underscored the fact that over the past 15 years, Bitcoin “has survived multiple cycles of boom and bust, clearly showing its staying power as an alternative asset,” though she had to point out that her support leans more towards Bitcoin’s underlying technology — distributed ledger (DLT) — rather than the cryptocurrency itself.

“The potential benefits of DLT are plain to see. It has the potential to enhance efficiency and lower costs in the distribution, clearing, settlement, and custody of real-world assets.”

Julia Leung

The SFC head also addressed the hype around non-fungible tokens (NFTs), saying that while digital collectibles “may be a fad,” the enabling technology is being “increasingly used in real-world assets.” As per Leung, tokenization may bring about “wider financial inclusion, fractionalization, custody and ownership, all on chain.”

However, Leung admitted that the full realization of these benefits in the financial sector would require significant advancements to be made. She particularly noted the necessity for blockchain networks to scale up and mature, emphasizing the importance of interoperability across distributed networks among financial institutions and across borders.

Hong Kong’s positive stance towards cryptocurrencies is evident as the region aims to position itself as a crypto-friendly hub, highlighted by the recent approval of spot Bitcoin and Ethereum exchange-traded funds (ETFs). However, despite this progress, authorities appear to be taking a tough stance towards unlicensed crypto exchanges, threatening to shut down all unlicensed crypto exchanges in the region.