Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury has defended the recent proposal by the city’s Financial Services and the Treasury Bureau to ban retail crypto trading.

In a speech delivered at StartmeupHK virtual fintech summit on Thursday, Hui said that the proposal was in line with the government’s plan to properly police the emerging crypto market.

As previously reported by Cointelegraph, the FSTB issued a proposal after months of consultation, calling for a ban on retail crypto trading and the establishment of a strict regulatory regime for cryptocurrency exchanges.

As part of the proposal set to be presented before the city’s legislature, the FSTB argued for a minimum investment threshold for crypto trading at about $1 million. This provision will reportedly exclude about 93% of Hong Kong’s population from the city’s cryptocurrency market if passed by the government.

However, Hui is of a different view, stating, “We are of the view that a proper regulatory system could facilitate development and at the same time protect investors and adhere to international regulatory standards.” According to the Hong Kong treasury chief:

“Imposing mandatory requirements to protect investors, prohibit market manipulation, and guard against money laundering and terrorist financing, we believe the proposed regime will further facilitate development of the virtual assets industry in Hong Kong, leveraging our world-class regulatory framework.”

Apart from shutting out retail crypto activity, Hong Kong’s restrictive laws may also force exchanges out of the city despite the government’s plan to allow foreign companies to obtain operating licenses in the city.

Indeed, back in December 2020, when the FSTB was still in the middle of its consultations, several industry stakeholders criticized the planned crypto regulations. At the time, critics argued that these restrictive virtual currency laws would be inimical to Hong Kong’s financial innovation agenda.