Hong Kong has expressed interest in becoming a global crypto hub as it has decided to be more welcoming to crypto companies. Opening up to newer crypto companies or startups could increase crypto retail participation in Hong Kong.
Paul Chan, Hong Kong’s Financial Secretary, recently spoke at the Web3 forum in Cyberport, reiterating in October last year that Hong Kong will continue to try converting itself into a global crypto hub.
The city remains optimistic despite the FTX fiasco, especially at a time when the industry continued to face the aftermath of the crash. Currently, crypto exchanges can register with the present licensing system, as authorities will soon issue licenses to crypto firms.
The news that Hong Kong aims to transform into a crypto hub comes as the Singapore crypto market has faltered due to the fall of FTX.
Paul Chan also mentioned that due to Hong Kong’s pro-crypto stance and the latest city policy statement, many leading tech firms and startups are considering shifting their headquarters and expanding to Hong Kong.
The names, however, were not disclosed. Specifically, the crypto firms have been keen on expanding their operations into the region to develop the market.
New Crypto Regime
The Hong Kong administration has completed the legislative work necessary to set up a licensing regime for the virtual asset services it provides.
This new regime requires the crypto exchanges to constantly be in sync with the present licensing regime that applies to traditional financial institutions.
Joseph Chan, the Under Secretary for Financial Services and the Treasury, have disclosed that Hong Kong is planning to have a consultation about crypto platforms to keep exploring the chances for increased retail participation within the crypto space.
It has also been mentioned that the initiative above included issuing tokenized green bonds by the Hong Kong government for subscription by institutional investors.
Joseph Chan said:
As certain crypto exchanges collapsed one after another, Hong Kong became a quality standing point for digital asset corporates. The city has a robust regulatory framework that matches international norms and standards while prohibiting free-riders.
Will Hong Kong’s Transformation Into A Crypto Hub Put Crypto Users At Ease?
Hong Kong has long been the financial hub and has been progressive with its regulations, but crypto enthusiasts have been studying China’s massive influence on Hong Kong.
With the China crypto crackdown on crypto mining and trading activity in 2021, users moved out of the market, creating a downfall within the broader market.
So, even if Hong Kong supports crypto, users will always be wary, as China can exercise control over the financial market in Hong Kong.