The Hong Kong Government has made it clear that it has no plan to issue official Digital Currency at present but will continue to explore the possibilities.
This was stated by Joseph Chan, Acting Secretary for Financial Services and the Treasury, in the parliament of the Chinese autonomous territory.
He gave a detailed reply to multiple questions by lawmaker Dennis Kwok in the Legislative Council Wednesday.
Kwok wanted to know if the government will consider enacting legislation to regulate the issuance, trading and storage of cryptocurrencies, and whether the Central Bank will issue a digital currency.
Chan told the Council that the Hong Kong Monetary Authority (HKMA), which is the region's de facto central bank, concluded after a research on the topic that a Central Bank Digital Currency (CBDC) would be less useful in Hong Kong compared to other jurisdictions.
"In the context of Hong Kong, the already efficient payment infrastructure and services make CBDC a less attractive proposition. The HKMA has no plan to issue CBDC at this stage but will continue to monitor the international development", he told the lawmakers.
Chan pointed to the potential money laundering or terrorist financing risks that cryptocurrencies pose due to their anonymous nature. He reminded financial institutions and related persons to comply with the statutory customer due diligence and record keeping requirements while doing business with operators of any cryptocurrency schemes or businesses.
The high-level government official said financial regulators are closely monitoring the development of ICOs and cryptocurrencies in Hong Kong. "They are also taking appropriate measures to safeguard the interest of the investing public".
Committee on Payments and Market Infrastructures (CPMI) and the Markets Committee (MC) of the Bank for International Settlements have formed a working group comprising all major central banks to conduct an in-depth study on the Central Bank Digital Currency.
In February, the Securities and Futures Commission (SFC) had taken regulatory actions against a number of cryptocurrency exchanges and issuers of ICOs in Hong Kong for operating without a license.
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