By skyforbes 
In a significant move to bolster its position in the cryptocurrency landscape, Hong Kong is set to implement new regulations aimed at enhancing the adoption and usage of digital assets among banks.
This initiative comes in the wake of a renewed wave of pro-crypto policies spearheaded by the United States, which aspires to establish itself as the world’s crypto capital. Recognizing the need to stay competitive, Hong Kong’s regulatory framework seems to be evolving to stay at the forefront of this race.
The Hong Kong Monetary Authority (HKMA) recently issued a draft document for public consultation, introducing a new module titled CRP-1, or “Crypto Asset Classification,” as part of its “Banking Regulatory Policy Manual.”
The HKMA aims to provide a structured approach to regulating crypto assets, particularly focusing on those linked to unlicensed blockchain technologies, commonly referred to as public chains.
She highlighted that the draft regulatory guidance will allow for lower capital requirements for banks dealing with crypto assets, provided that issuers can demonstrate effective risk management measures.
By addressing digital assets launched on public blockchains, the proposals suggest that these cryptocurrencies could benefit from reduced capital requirements, thereby incentivizing banks to engage more actively with digital assets.
Earlier this year, the region introduced stablecoin regulations, enforcing a licensing regime for stablecoin issuers that requires compliance with strict asset management and client asset segregation protocols.
Featured image from DALL-E, chart from TradingView.com