By Hong Kong vigorously promotes the tokenization of traditional financial instruments, BiFinance’s advantages and future plans
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The Hong Kong cryptocurrency market has witnessed new developments that are driving the tokenization of traditional financial instruments.
According to Huang Lexin, Director of Intermediaries Supervision Department and Head of Fintech at the Securities and Futures Commission (SFC), tokenization will be a key focus during the upcoming Hong Kong Fintech Week from October 30th to November 5th. The SFC strongly supports the continued tokenization of traditional financial instruments and intends to propose ideas that enable the industry to continue experimenting within a clear regulatory environment.
On October 20th, 2023, the SFC released a joint circular on virtual asset-related activities by intermediaries. Under the updated guidelines, brokerages and banks holding Type 1 and Type 4 licenses can offer virtual asset and security token offering (STO) services to retail investors, expanding beyond the previous restriction that limited these services to compliant exchanges.
The circular also clarifies that digital asset custody can be conducted by traditional financial institutions such as banks. Furthermore, the SFC officially recognizes the legitimacy of security token offerings (similar to traditional stock IPOs). Licensed institutions can issue security tokens through STO after undergoing review by the SFC.
Background of BiFinance, an institutional-grade digital asset trading platform
BiFinance, an institutional-grade digital asset trading platform, has been dedicated to compliance since its establishment, distinguishing itself from other CEX platforms. Bob, spokesperson for BiFinance, shares, “Over 70% of our team members come from traditional brokerages, financial institutions, and Web3 investment research teams, forming an institutional-grade professional team. Additionally, our main investor is a fully licensed brokerage in Hong Kong, holding licenses 1, 4, 7, and 9. We are currently working towards adding virtual asset business to our existing licenses, with the goal of providing virtual asset and security token offering (STO) services to retail investors.”
“This year, we have witnessed a strong regulatory attitude towards the crypto industry worldwide. This is beneficial for the long-term development of the industry, as more professionals from traditional finance will join the field. It also means that a significant amount of market capital will enter the crypto market through compliant channels. With our investor’s full licensing background and resources, rich experience in Hong Kong IPOs, we have the potential to obtain priority in issuing STO tokens based on our existing licenses. This allows us to explore tokenization upgrades with over one hundred listed IPO companies that we serve. Additionally, it provides a secure, trusted, and compliant trading platform for traditional Web2 investors.”
BiFinance aims to increase liquidity in both traditional finance and the crypto market through STO
Analysts point out that BiFinance’s mission of solving financing difficulties for SMEs and bridging the gap between the virtual and real worlds is achieved by providing a regulated and accessible funding avenue through STO. Compared to the chaotic and unregulated nature of ICOs and the high entry barriers of IPOs, STO prioritize regulatory requirements, reducing fraud and illegal activities while attracting professionals with financial expertise into the crypto market. As of 2022, China alone had approximately 35 million registered SMEs, contributing around 60% to GDP. BiFinance aims to address the financing challenges faced by SMEs and provide solutions for market liquidity. Furthermore, it positions itself to tap into the trillion-dollar traditional financial market leveraged by STO, injecting increased liquidity and stability into the crypto market.
Prior to the implementation of STO-related policies, BiFinance has been actively expanding its product lineup beyond spot services in the cryptocurrency market. This includes the already launched Launchpad, staking, and upcoming leverage services. With the gradual clarification of crypto policies and regulations, BiFinance believes it will break the current stagnation of CEX exchanges characterized by scattered user bases and funds. It aims to penetrate the Web2 market of brokerages and banks, providing investors in the crypto market with a comprehensive, secure, and compliant trading platform.
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