Hong Kong Government: Bitcoin Has No ‘Visible Impact’ on Financial System

by | May 2, 2018 | Bitcoin, Cryptocurrency, Cryptocurrency News

Bitcoin | Hong Kong | Virtual currencies | FSTB Hong Kong | Bitcoin news

The Hong Kong Financial Services and Treasury (FSTB) released a report on April 30, covering the the status of money laundering (ML) and terrorism financing (TF).

The report concluded that virtual currencies (VC), like Bitcoin (BTC), are not particularly involved in either type of financial crime.

“Although there is inherent ML/TF vulnerability related to VCs, there does not seem to be any visible impact affecting the overall risk in Hong Kong so far. The risk of VCs is assessed as medium-low,”

“The current legal and regulatory provisions relating to ML, TF, fraud and other crimes are wide enough to catch offences involving the use of any general property, including VCs.”

The report is the latest data point in a growing body of research that suggests bitcoin’s associations with criminal activity have been far overblown and that the rate of illicit transactions is decreasing over time as cryptocurrencies become more common in mainstream financial markets.

The legal and regulatory provisions related to money laundering, terrorist financing, fraud and other crimes are good enough to catch the offenders. Additionally, the financial regulators and law enforcement agencies are looking into the risks related to Initial Coin Offerings [ICO] and cryptocurrencies. The report further stated:

“While we have not found substantial risks in these newly developing payment methods or commodities, this is a rapidly developing area requiring continued monitoring.”

Cryptocurrencies are not considered legal tender in Hong Kong. The FTSB suggests that because Hong Kong “is one of the world’s freest economies with a vibrant foreign currency exchange market and no capital controls […] VCs are therefore not as attractive as in economies where people may try to circumvent currency controls or seek refuge from a high inflation rate”

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