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Hong Kong remains unwavering in its quest to become Asia's digital asset hub in spite of the catastrophic consequences of the collapse of cryptoftx trading.
In a new report by Bloomberg, the city said that it’s going forward with becoming a global crypto hub and says it will learn lessons from the collapse of the crypto market in 2022, which saw $2 trillion wiped from the market, and will use that to establish a regulatory framework that will protect investors and encourage growth within the sector.
Hong Kong Seeks to Restore its Reputation as a Financial Hub
Recently Hong Kong became vocal about its intentions to foster the crypto sector as part of an effort to restore the city’s reputation as a financial center. Hong Kong’s financial secretary, Paul Chan, spoke at a Web3 forum and said that Hong Kong is a good place for cryptocurrency, financial technology, and other startups to set up shop. Singapore was previously known for being somewhat of a crypto-haven but has taken a step back by introducing numerous measures that make it difficult for crypto-related firms to set up shop, and Hong Kong would like to seize that opportunity.
According to Bloomberg’s report, Matrixport Technologies Pte, a crypto lender with 300 staff, is one of many firms assessing the city’s “evolving rulebook.” Singapore was previously known for being somewhat of a crypto-haven but has taken a step back by introducing numerous measures that make it difficult for crypto-related firms to set up shop, and Hong Kong wants to seize this occasion. The report cites people who are knowledgeable about the issue, who stated that matrixport is assessing the possibility of settling in Hong Kong while it is waiting for the outcome of its application for a virtual resources licence in Singapore.
Not long after Chan spoke out about the city’s intention of becoming the crypto hub it formerly was, Hong Kong’s Secretary for Financial Services and the Treasury, Christopher Hui, made a show of support for the crypto industry. Today calls for a stronger regulatory framework for investor protection and fraud prevention. Hui, overseeing the development of strategic direction for Hong Kong's cryptography sector, announced that Finance and the Treasury Office (fstb) are testing a non-financial offer, tokening green bonds and a central bank numerical currency (cbdc) – e-hkd, as part of a concerted effort to assess potential crypto-asset use cases and establish a macro regulatory approach.
According to Bloomberg’s report:
Hong Kong’s crypto plan includes a mandatory exchange licensing regime due in June and a consultation on allowing retail trading. Officials have also permitted exchange-traded funds to invest in CME Group Inc. Bitcoin and ether coming. The Hong Kong crypto plan includes a compulsory exchange licence regime in June and a retail authorization consultation.
Opinion
Hong Kong’s plans to reclaim its position as Asia’s financial and especially crypto hub are likely to succeed. With so many crypto-related companies based in Singapore now facing rapid and "crypto-prudent" approach to the country's regulation, one can see the value of switching to Hong Kong. Not only is the city making a concerted effort to attract companies involved in cryptography. With so many crypto-related companies based in Singapore are now confronted with the rapid and "crypto-prudent" approach to the country's regulation, one can see the value of switching to Hong Kong.
