Trump’s crypto executive order could derail Hong Kong’s virtual-asset-hub ambitions.

Hong Kong faces an uphill battle to maintain its edge in the virtual-asset industry as US President Donald Trump unveils digital asset-friendly policies aimed at making the US the “crypto capital of the planet”, experts say.

Trump on Friday signed a long-awaited executive order to boost America’s digital asset sector, with steps including creating a group tasked with advising the White House on crypto regulations and revoking earlier orders that have “stifled innovation.”

The executive order adds challenges to Hong Kong’s goal of becoming a virtual-asset-hub, especially in attracting international talent, by making it clear to the industry that the Trump administration “supports a 180-degree turn on crypto,” Stephan said. Lutz, CEO of cryptocurrency exchange BitMEX.

A previously crypto-unfriendly environment in the US has made Hong Kong “one of the few most active and rather successful international crypto centers in Asia,” he said.

The flag of Hong Kong and a stack of Bitcoin tokens can be seen in this illustration. Photo: Shutterstock Images alt=The flag of Hong Kong and a stack of Bitcoin tokens can be seen in this stock image. Photo: Shutterstock Images>

“Hong Kong will face – not today, but after people gain confidence in the Trump administration’s actions – stronger headwinds for the crypto industry,” Lutz said.

Hong Kong It has announced its ambition to become a global virtual-asset hub by the end of 2022, and has launched a series of startups over the past two years, including a licensing system for crypto exchanges, a direct-tracking bitcoin exchange and trading platform. ether, and the introduction of a legislative bill on stablecoins.

The city is nowFix itAfter receiving market feedback, the proposal to regulate over-the-counter virtual asset trading and will introduce a licensing system for crypto guardian services next year, Financial Services and Treasury Acting Secretary Joseph Chan said in a statement in December.

Just days into the Trump administration, the US Securities and Exchange Commission has taken action that could take some of the wind out of Hong Kong’s sails.

The US regulator on Thursday overturned a controversial accounting directive known as SAB 121 that forced US companies to record liabilities on their accounts for their customers holding crypto assets, making it “economically prohibitive” to provide protection solutions for them. According to Andrew Fe of King & Wood Malleson in Hong Kong.

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Pedestrians walk past a Bitcoin display in Hong Kong, February 15, 2022. Photo: Getty Images alt=Pedestrians walk past a Bitcoin display in Hong Kong on February 15, 2022. Photo: Getty Images>

“The repeal of SAB 121 means more US companies will enter the digital assets holding space,” Fay said. “This comes as Hong Kong considers a new licensing system for virtual asset protection service providers.”

Trump’s new plan for the working group to set up a permanent coin regulator system could derail the development of Hong Kong’s stablecoin.

The U.S. position to back stablecoins could “limit” other fiat-backed stablecoins, including the Hong Kong dollar stablecoin and the offshore renminbi stablecoin, in international competition, said Terence Pu, managing director of HashKey Exchange.

“The (Hong Kong dollar’s) stable coin development and global introduction will face additional challenges,” Pu said. “Hong Kong must explore ways to achieve breakthroughs in the multi-currency stablecoin ecosystem to maintain its competitiveness in the crypto asset space.”

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