Hong Kong and China might probably be near per the geographical distance thereof. However, there is a clear difference in methods by which both the authorities regulate crypto. A recent instance provided a great example to elaborate on this.

The laundering event

On December 28th, the Hong Kong Special Administrative Region Government declared that it had arrested two out of the people in the laundering case of up to $384M. The sister and brother, both having age between twenties, accursedly utilized bank accounts as well as exchange for transferring several assets in which crypto was also included. The exchange on which this occurred was not disclosed.

In a press release on the behalf of the government, it was mentioned that an additional exploration of the respective matter resulted in the arrest of two individuals who initiated their accounts during May and November of the recent year at several banks across Hong Kong together with the virtual banks as well as a crypto exchange trading venue, and got involved in the suspected laundering money by having a contract with money earned from anonymous sources via bank transfers, cryptocurrency, and cash deposits.

Though China has implemented stern prohibitions along with warning the violators additionally, it seems that Hong Kong is even at the present, is attempting to ensure the crypto regulation thereof. The special administrative area, being dissimilar to its fellow, does not put a straightforward prohibition over crypto. Nonetheless, the country has assured to put regulations and there is a possibility that the viewpoint of China regarding the crypto could create an impact on the scenario of Hong Kong additionally.

In contrast, some options such as a likely CBDC have also been considered by Hong Kong. The HKMA (Hong Kong Monetary Authority) issued a technical whitepaper in this respect. Apart from this, the administrations are also guaranteeing that consumers traveling between Hong Kong and China would be permitted to utilize the e-CNY. Currently, the effect of the fintech upgrade over the crypto regulation of Hong Kong is yet to be seen.

A CBDC and the potential laundering

While keeping the above-mentioned picture in mind, it would not be right to consider that such laundering could be stopped by the launch of a CBDC. During the early period of November, the earliest money laundering case was reported by Chinese media which dealt with the digital yuan. The arrest of nearly 11 people was carried out on the behalf of Zhenzhou Public Security Bureau’s Anti-Fraud Center and Xinmi Public Security division for accursedly being involved in a fraud of telecommunications dealing with e-wallets.