The certification mechanism for over-the-counter (OTC) trading of virtual assets in Hong Kong has elicited mixed reactions within the related industry, as reported by the Hong Kong Economic Journal.

Companies are expressing concerns over Hong Kong's OTC certification mechanism, which mandates that virtual assets be traded on platforms certified by the Securities and Futures Commission. The restriction to only Bitcoin and Ethereum for tradable assets has raised apprehensions among industry observers, particularly regarding its potential impact on OTC activities, especially considering limitations on stablecoin transactions.

Customs officials have announced the conclusion of the consultation process, but they are open to receiving opinions and suggestions, after which the bill will be forwarded to the Legislative Council.

Industry players have expressed dissatisfaction with the proposed restrictions on stablecoins like USDT and USDC.

The consultation report emphasizes stringent client due diligence processes and mandates the employment of compliance and anti-money laundering personnel, which could pose significant financial burdens on smaller OTC businesses. Industry representatives have urged for a balanced approach, taking into account the diverse market landscape and client preferences.

As discussions continue, stakeholders are actively engaging with officials to reconsider Hong Kong's OTC certification mechanism and tailor regulations as needed.

Additionally, Hong Kong has granted trading approval for Bitcoin ETFs and Ethereum ETFs.