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Hash Blockchain Limited, a member of the HashKey Group, a digital asset financial services group in Asia, has “received approval” from the Securities and Futures Commission of Hong Kong (SFC) in order “to operate a virtual asset trading platform, under a Type 1 (dealing in securities) license and a Type 7 (providing automated trading services (ATS)) licence for professional investors.”

With the SFC licenses, HashKey Group claims it has now “become the world’s first digital asset group with virtual asset licenses from the Hong Kong SFC, the Financial Services Agency of Japan and an exemption to operate under the Payment Services Act from the Monetary Authority of Singapore.”

HashKey PRO is “the name of HBL’s institutional-grade virtual asset trading platform. HashKey PRO will provide professional investors automated trading services for cryptocurrencies such as Bitcoin and Ether, as well as stablecoins, security tokens and other innovative assets.”

Unlike other unregulated crypto trading platforms, HashKey PRO is “designed to ensure there is a high level of client asset protection.”

Client assets are “segregated and held in custody by HashKey Custody Services Limited, which holds a Trust or Company Service Provider licence in Hong Kong.”

HBL’s licence issuances “come after a statement on October 31, 2022 by the city’s Financial Services and the Treasury Bureau, which outlined its vision and approach to develop Hong Kong into an international virtual assets hub.”

Michel Lee, Executive President of HashKey Group, said:

“The recent policy statement is a testament to the Hong Kong government’s dedication and commitment to fortify the city’s status as a frontrunner and leader in blockchain and virtual asset innovation and regulation. We are delighted to have received the licences given the backdrop of this positive announcement. This enables us to provide regulated and compliant virtual asset trading services as we continue to help build the financial, technological and service infrastructure to facilitate and contribute to the rapid growth and the long-term development of the ecosystem.”

Colin Zhong, CEO of HBL, said:

“Our objective is to build a platform that is best in class in terms of technology, security and trading experience for our clients. One of the focuses of HashKey’s virtual asset exchange will be on the tokenisation of non-traditional assets, leveraging the robust ecosystem HashKey has developed over the years. Apart from trading services, HashKey is also dedicated to supporting and providing a gateway for financial institutions and corporates to gain exposure to, and participate in, crypto projects through our comprehensive ecosystem across the digital asset landscape and Web3 infrastructure services.”

In 2022, the Hong Kong government and regulators “have been setting out new guidelines and a licensing framework to regulate virtual asset trading activities in the interest of consumer and investor protection.”

A joint circular announcement was “issued by the SFC and the Hong Kong Monetary Authority on January 28 2022 stating that registered institutions and licensed corporations are required to partner only with SFC-licensed VATPs in order to provide virtual asset dealing services to their clients.”

At Hong Kong FinTech Week 2022, the SFC also “released a Circular on Virtual Asset Futures Exchange Traded Funds, which states that the SFC will start accepting applications for the authorisation of such funds.”

The SFC has “started reviewing the ‘professional investor only’ requirement applicable to the investment of virtual asset products and are preparing a circular to set out a modified security token regime to treat tokenized assets in line with traditional securities assets on a ‘same business, same risk and same rules’ approach.”

The Bank of Russia proposes to discuss possible circulation of digital assets “at exchange trading, harmonization of approaches to their taxation with traditional financial instruments, conditions for acquiring digital assets by individual institutional investors, establishment of the accounting procedure for such investments, as well as opening the domestic market for foreign issuers from friendly countries.”

These and other initiatives are “included in the regulator’s consultation paper.”

The issuance and circulation of digital assets is “a new phenomenon in the financial market,” according to the Bank of Russia.

Their advantage “lies in the fact that they can be based on distributed ledger technology, thus automating transactions through smart contracts.”

Optimization of data storage and transmission “adds to the efficiency of business processes and reduces costs.”

An appropriate legal framework has been “created in Russia for the issuance and circulation of digital assets in information systems.” However, the market is “currently at the early stage of its development and, in terms of volume, is many times behind the market of traditional financial instruments.”

Further development of the digital rights market and the appearance of new products and services there “require enhanced regulation.”

The initiatives of the Bank of Russia will “contribute to the advancement of the infrastructure of digital assets and increase their attractiveness for issuers and investors while protecting their rights and interests.”

The Bank of Russia “accepts comments and suggestions on the consultation paper until 7 December 2022.”

For more details on this update, check here.

As reported in September 2022, the Bank of Russia and market participants “launched the testing of the digital ruble platform and successfully completed the first digital ruble transfers between individuals.”

The creation of a prototype of the digital ruble platform was “finished in December 2021.”

Twelve banks announced their readiness “to take part in testing the platform.”

Three banks from the pilot group have already “connected to the platform.” Two of them have successfully “completed a full cycle of digital ruble transfers between clients using banking mobile applications.”

In addition to opening digital wallets on the digital ruble platform, clients were also able “to exchange non-cash rubles in their accounts for digital ones, and then they transferred digital rubles between themselves.”

Other members of the pilot group are going “to join the testing of the digital ruble platform as soon as their IT systems are finalized.”

The Bank of Russia’s and market participants’ interaction in operations “with digital ruble is based on a two-tier retail model approach.”

The Bank of Russia is “the issuer of a digital ruble and the operator of the platform.” Within this framework, clients “open wallets and conduct operations via them on the digital ruble platform through financial institutions.”

Thanks to the unique character of a digital ruble clients “will be able to access their digital wallets via mobile applications of their respective banks.”