In response to Bloomberg, Hong Kong has obtained purposes from 24 firms searching for licenses to function cryptocurrency exchanges within the metropolis in an effort to ascertain itself as a cryptocurrency alternate. regulated hub for the cryptocurrency trade.
Candidates embody well-known gamers similar to Bybit, OKX and Crypto.com, whereas Binance, Coinbase and Kraken are absent. Nevertheless, the town’s digital asset rulebook prioritizes investor safety, however the attendant compliance prices might pose a problem for some firms.
Binance, Coinbase ignore Hong Kong’s cryptocurrency license race
based on ReportThe listing of candidates consists of well-known gamers within the digital asset house, similar to Gate.io, HTX, and Bullish, all of which have vital buying and selling volumes. Nonetheless, the absence of main exchanges similar to Binance, Coinbase and Kraken raises questions on its strategic selections in Hong Kong.
The applicant listing can be utilized as a gauge of trade sentiment, exhibiting the extent of confidence in Hong Kong’s regulatory framework. Angela Ang, senior coverage advisor at blockchain intelligence agency TRM Labs, sees the presence of well-known gamers as a constructive signal.
It’s price noting that Hong Kong’s 24 firms that utilized for alternate licenses lag far behind Singapore, which has about 70 firms. Formal utility The variety of individuals making use of for licenses by the tip of 2021 is 3 times the variety of Hong Kong candidates thus far.
Nevertheless, the true measure of Hong Kong’s success will rely on the investments these firms make within the native market. Compliance prices related to working a regulated enterprise within the digital asset trade are inevitable and should be factored into long-term methods.
OTC buying and selling dominates Hong Kong’s cryptocurrency inflows
The report states that Hong Kong has shifted its focus to turning into a cryptocurrency heart by the tip of 2022, aiming to reveal its technological capabilities and safe its future. At the moment, HashKey Alternate and OSL Group are the one approved digital asset exchanges within the metropolis.
Nevertheless, most digital visitors into Hong Kong happens in over-the-counter (OTC) buying and selling quite than digital asset exchanges. Chainaanalysis knowledge exhibits that roughly US$64 billion of cryptocurrency entered Hong Kong via over-the-counter buying and selling channels final yr.
The federal government reportedly needs to control over-the-counter retailers that facilitate cash-to-cryptocurrency buying and selling with minimal oversight.As well as, Hong Kong is exploring the regulation of stablecoins and contemplating introducing alternate traded funds (ETF) invests instantly in chosen cryptocurrencies.
Total, the continued growth of Hong Kong’s digital asset buying and selling trade and the inflow of working license purposes mirror Hong Kong’s ambition to change into a regulated heart for the cryptocurrency trade.
Nevertheless, the compliance prices related to working a regulated enterprise pose a problem that firms should take into account.
In gentle of this newest growth, Bitcoinist beforehand report HTX has deserted efforts to acquire a cryptocurrency buying and selling license in Hong Kong. Three different cryptocurrency alternate operators additionally reportedly withdrew their purposes.
Featured picture from Shutterstock, chart from TradingView.com
