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Based on a Bloomberg report, Hong Kong has acquired purposes from 24 firms in search of licenses to function crypto exchanges within the metropolis because it makes an attempt to ascertain itself as one of many main crypto exchanges within the metropolis. regulated hub For the cryptocurrency trade.
Candidates embrace notable gamers equivalent to Bybit, OKEx and Crypto.com, whereas Binance, Coinbase and Kraken are absent. Nonetheless, the town's digital property rulebook, which prioritizes investor safety, comes with compliance prices which may be difficult for some firms.
Binance, Coinbase go away Hong Kong's crypto license race
Per reportThe record of candidates consists of well-known gamers within the digital asset sector equivalent to Gate.io, HTX and Bullish, which have demonstrated notable buying and selling volumes. Nonetheless, the absence of main exchanges equivalent to Binance, Coinbase and Kraken raises questions on their strategic selections relating to Hong Kong.
The record of candidates serves to gauge trade sentiment, reflecting 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 acknowledged gamers as a constructive signal.
Notably, Hong Kong's 24 candidates for an change license is way behind Singapore, which has about 70 firms. formally applied The variety of candidates in Hong Kong for licenses by the top of 2021 is 3 times what it has been to date.
Nonetheless, the true measure of Hong Kong's success will rely on the funding these firms make within the native market. Compliance prices related to working a regulated enterprise within the digital asset trade are unavoidable and needs to be factored into long-term methods.
OTC buying and selling dominates crypto flows in Hong Kong
Hong Kong has set its sights on turning into a cryptocurrency hub in late 2022 with the purpose of showcasing its technological capabilities and securing its future, the report mentioned. At present, Hashkey Change and OSL Group are the one approved digital asset exchanges within the metropolis.
Nonetheless, a lot of the digital inflow has occurred in Hong Kong over-the-counter (OTC) digital asset buying and selling as a substitute of exchanges. About $64 billion of cryptocurrency got here into Hong Kong by way of OTC channels final yr, Chainalysis information exhibits.
The federal government reportedly desires to control OTC shops that facilitate cash-to-crypto transactions with minimal oversight. Moreover, Hong Kong is exploring and contemplating implementing laws for stablecoins change traded funds (ETFs) that make investments straight in chosen cryptocurrencies.
Total, the continuing growth of Hong Kong’s digital asset change sector and the inflow of purposes for working licenses displays the town’s ambition to develop into a regulated hub for the cryptocurrency trade.
Nonetheless, the compliance prices related to working a regulated enterprise create challenges that firms should think about.
In mild of this newest growth, Bitcoinists first knowledgeable of HTX has pulled out of its efforts to safe a cryptocurrency change license in Hong Kong. Based on the report, three different cryptocurrency change operators have additionally withdrawn their purposes.
Featured picture from Shutterstock, chart from tradingview.com