Hong Kong Treasury says crypto is not a ‘target asset’ for its Exchange Fund

Hong Kong’s Treasury Department does not consider crypto a ‘target asset’ for the country’s Exchange Fund, although it invests a small portion of the funds in crypto assets.

According to local media outlet On CC, Hong Kong Assemblyman Johnny Ng suggested that the government should consider adding cryptocurrencies to its financial reserves. Ng said the government could use the Hong Kong Exchange Fund to hold and purchase crypto assets.

Minister of Financial Services and Treasury Joseph Chan responded to Ng’s request in a written letter, explaining that crypto assets are not “target assets” for Hong Kong Exchange Fund investments.

However, Chan confirmed at the Legislative Council meeting that the Hong Kong Exchange Fund holds a small amount of crypto assets through external investment managers. But he said the rate was “too small.”

Hong Kong Monetary Authority external investment managers generally diversify the fund’s asset classes and markets with assets and stocks from around the world based on asset performance evaluated by the external investment managers at different times.

Chan pointed out that the authorities issued the “Policy Declaration on the Development of Virtual Assets in Hong Kong” in October 2022, and stated that the government and regulatory bodies adhere to the principle of “same business, same risks, same rules” when it comes to the issue. to virtual entities.

Additionally, authorities introduced a licensing system for virtual asset service providers by making amendments to the Anti-Money Laundering and Combating Terrorist Financing Regulation Bill to ensure that crypto trading platforms comply with international standards.

As previously reported by crypto.news, the Hong Kong government is looking to speed up crypto regulation to keep up with the rapidly evolving global crypto industry.

Chan did not elaborate on how the Hong Kong government plans to step up crypto regulations. But he also acknowledges that the virtual asset sector presents “complexities to the financial system,” as well as many financial innovation opportunities.