The Hong Kong regulator has developed standards for tokenization and storage of digital assets
In addition, the regulator has introduced requirements for institutions to manage conflicts of interest when working with digital assets
On February 20, the Hong Kong Monetary and Financial Authority (HKMA) published standards on tokenization and storage of digital assets for local authorized institutions. Organizations are encouraged to conduct a comprehensive risk assessment and allocate sufficient resources for proper management and control in the provision of cryptocurrency storage services. In addition, the HKMA required institutions to develop internal policies to appropriately address potential or existing conflicts of interest.
Authorized institutions should separate customer assets from company funds and maintain recovery plans to reduce "the risk of loss of customer digital assets as a result of theft, fraud, negligence or other acts of misappropriation," the HKMA guidance says.
Other de facto requirements of the central bank of Hong Kong include full disclosure of the risks associated with the storage of cryptocurrencies and compliance with the Anti-Money Laundering and Terrorist Financing Guidelines (AML/CFT).
"Authorized institutions must notify the HKMA and confirm that they meet the expected standards within six months from the date of publication of this guidance," representatives of the regulator noted.
