Two recent developments in cryptocurrency policy reveal how Hong Kong continues to function as China’s financial bridge to the digital asset world, even under the “one country, two systems” framework.
The first development involves Beijing’s approach to disposing of confiscated cryptocurrencies. According to a Caixin report following an announcement by Beijing police, mainland authorities are leveraging Hong Kong’s licensed cryptocurrency exchanges to sell seized digital assets.
The process works through intermediaries: Beijing’s law enforcement division instructs the state-owned Beijing Equity Exchange (CBEX) to dispose of the cryptocurrencies, which then utilizes Hong Kong’s regulated exchanges for the actual sales. The Hong Kong Monetary Authority (HKMA) has licensed ten cryptocurrency exchanges to date, providing Beijing with legitimate channels for these transactions.
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