The Securities and Futures Commission, the regulatory body for securities in Hong Kong, plans to allow professional investors to trade cryptocurrency derivatives, marking a significant expansion of the virtual asset market offerings in the region, according to a report from China Daily.
Cryptocurrency derivatives represent a much larger market than spot trading. Data from Token Insight shows that the cryptocurrency derivatives market exceeded $21 trillion in volume for the first quarter of the year, compared to $4.6 trillion in spot trading volume.
Industry stakeholders have long urged Hong Kong to license cryptocurrency derivatives trading.
In an interview with the South China Morning Post earlier this year, Jan-David Békiniou, Chief Commercial Officer at Deribit, stated that cryptocurrency derivatives regulations were a missing part of the legislation in Hong Kong.
The Legislative Council in Hong Kong, the parliamentary body, recently passed a bill that would allow the licensing of stablecoins in the city.
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