Based on a Bloomberg report, Hong Kong has obtained purposes from 24 firms searching for licenses to function crypto exchanges within the metropolis because it strives to ascertain itself as a regulated hub for the cryptocurrency business.
Notable gamers equivalent to Bybit, OKX, and Crypto.com are among the many candidates, whereas Binance, Coinbase, and Kraken are absent. Nonetheless, town’s digital asset rulebook, which prioritizes investor safety, comes with compliance prices that could possibly be difficult for some firms.
Binance, Coinbase Omit Hong Kong’s Crypto License Race
Per the report, the record of candidates contains well-known gamers within the digital asset area, equivalent to Gate.io, HTX, and Bullish, which have demonstrated notable buying and selling volumes. Nonetheless, the absence of main exchanges like Binance, Coinbase, and Kraken raises questions on their strategic selections relating to Hong Kong.
The record of candidates serves as a gauge of business sentiment, indicating the boldness degree 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 alternate licenses lag considerably behind Singapore, the place some 70 firms have formally utilized for a license by the top of 2021, 3 times the variety of candidates in Hong Kong thus far.
Nonetheless, the true measure of Hong Kong’s success will depend upon the investments these firms make within the native market. Compliance prices related to working a regulated enterprise within the digital asset business are inevitable and have to be factored into long-term methods.
OTC Buying and selling Dominates Crypto Inflows In Hong Kong
The report notes that Hong Kong has shifted its focus to turning into a cryptocurrency hub in late 2022, aiming to showcase its technological capabilities and safe its future. At present, HashKey Alternate and OSL Group are town’s solely approved digital asset exchanges.
Nonetheless, most digital flows into Hong Kong have occurred over-the-counter (OTC) buying and selling moderately than digital asset exchanges. Chainalysis knowledge reveals that round $64 billion of crypto entered Hong Kong by way of OTC channels final yr.
The federal government reportedly needs to manage OTC shops that facilitate cash-to-crypto transactions with minimal oversight. In addition, Hong Kong is exploring rules for stablecoins and contemplating introducing exchange-traded funds (ETFs) that make investments straight in chosen cryptocurrencies.
Total, the continued improvement of Hong Kong’s digital asset alternate sector and the inflow of purposes for working licenses replicate town’s ambition to turn into a regulated hub for the cryptocurrency business.
Nonetheless, the compliance prices related to working a regulated enterprise pose challenges that firms should take into account.
In gentle of this newest improvement, Bitcoinist beforehand reported that HTX has withdrawn from its efforts to safe a cryptocurrency alternate license in Hong Kong. Based on the report, three different cryptocurrency alternate operators have additionally withdrawn their purposes.
Featured picture from Shutterstock, chart from TradingView.com
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