Hong Kong has A recurring relationship with crypto: Earlier than China banned all crypto-related exercise in 2021, the Asian monetary hub was the primary house of a number of crypto startups, together with defunct FTX, which left for the Bahamas after the ban. Now, Hong Kong welcomes crypto companies once more, however this time with extra regulatory readability.
Throughout its government-backed fintech week late final yr, Hong Kong signaled its intention to legalize crypto retail and introduce a licensing regime for digital asset suppliers. The plan took form in February when town launched draft guidelines that might enable particular person traders to commerce some main cryptocurrencies beginning June 1.
Firms are already reacting to the change in perspective of town. As of February, the overseas direct funding division had acquired “expressions of curiosity” from greater than 80 digital asset-related firms from mainland China and abroad to determine a presence in Hong Kong. KuCoin, one of many largest crypto exchanges on this planet, already introduced final yr that it could open an workplace within the metropolis.
Whereas these developments are encouraging indicators for some, others surprise if the semi-autonomous area has the precise situations for all types of Web3 organizations and companies to thrive. The primary consensus is that crypto-trading associated companies are more likely to be the primary to reap the rewards of the coverage change.
Too massive to overlook
When Hong Kong was returned to China in 1997, Beijing established a “one nation, two techniques” regime that granted town a excessive stage of autonomy in authorized, financial and social issues. Export-oriented Chinese language firms have begun to make use of town as a logistics and clearinghouse, and multinationals have arrange shops there as a gateway to China.
In recent times, nonetheless, Hong Kong has more and more misplaced its attraction as a springboard connecting China and the skin world after episodes of political fallout and strict COVID controls.
