Bitcoin has taken a lot of flak from governments across the world who have labelled the volatile cryptocurrency as one of the biggest scams to have hit the market.
Many financial regulations across the world have instructed their banks and citizens to avoid trading with bitcoin as it exposes them to massive risk and potential cybercrime. However, not all governments and financial analysts share this view about bitcoin.
The Hong Kong government recently came out and announced that it does not consider bitcoin a high risk when it comes to financial crime.
The Hong Kong Financial Services and Treasury (FSTB) recently released a report which addressed issues such as terrorism financing and money laundering activities. FSTB also looked at cryptocurrencies and ruled that bitcoin does not play a major role in any of these illegal activities.
Cryptocurrencies are currently not accepted as legal money in Hong Kong. However, there are a few bitcoin ATM’s in Hong Kong but they are not used by a lot of people. The FSTB said at the moment bitcoin is not a high risk to money laundering and terror financing activities, however the agency confirmed that it will continue to keep a close watch on cryptocurrencies.
Bitcoin Placed On Low-Medium Risk Level
The FSTB ranked bitcoin on a low to medium risk level because of unscrupulous Initial Coin Offerings (ICO’s) and cryptocurrencies in general. The Hong Kong government is looking at putting more regulations in place that will monitor the cryptocurrency industry and ensure that its residents are not exploited.
Hong Kong has one of the most vibrant economies in the Asian continent and is probably one of the reasons why its citizens are not as caught up with cryptocurrencies as some of the other nations of the world.
The FSTB report went on to say
Hong Kong is one of the world’s freest economies with a vibrant foreign currency exchange market and no capital controls. Virtual currencies are therefore not as attractive as in economies where people may try to circumvent currency controls or seek refuge from a high inflation rate
One of the other reasons why Hong Kong residents have not been hasty to jump on the bitcoin bandwagon is because of the massive fluctuation in bitcoin’s value over the last 5 months. Hong Kong investors at the moment prefer to place their funds in traditional investment opportunities and bitcoin is still too new for them to get fully on board.