Hong Kong is going to allow professional investors to trade in encrypted derivatives

The Hong Kong Securities and Futures Supervisory Commission (SFC), the Hong Kong securities regulator, is planning to allow professional investors to trade in encrypted derivatives. According to China Daily, this initiative marks a significant expansion of virtual asset market products in the region.

Encrypted derivatives markets are much larger than spot transactions. According to TokenInsight, in the first quarter of this year, the trade in encrypted derivatives markets exceeded $21 trillion, compared to $4.6 trillion in spot markets.

Industry stakeholders have long called on Hong Kong to regulate the licensing of encryption derivatives. In an interview with the South China Morning News earlier this year, Jean-David Pequeno, Chief Business Officer of Deribit, one of the largest derivatives exchange, stated that the code of encrypted derivatives was a missing puzzle in Hong Kong's legislation.

In addition, the Legislative Council of Hong Kong, as its parliamentary body, had recently passed a bill that would allow for the licensing of stable coins in cities.