Hong Kong is the great hope of the crypto world. While the United States and Europe choose to regulate and limit, the Asian metropolis is preparing to welcome the thousands of investors who are looking for a free and legal environment with which to buy and sell cryptocurrencies with open arms.
Changes from June. As described by Reuters, the Hong Kong government, through the Secretary of Finance, Paul Chan, has explained that it plans a new regulation that would take effect from June 1. The legalization of ‘smart contracts’ will be explored, as well as scheduled transactions.
Hong Kong’s proposal contrasts with China’s and even Singapore’s. These two powerhouses support blockchain technology but are more conservative with crypto. Meanwhile, Hong Kong plans to allow operators to legally trade tokens.
Applauded by large exchanges. Brian Armstrong, CEO of Coinbase, has made his opinion clear. In a tweet he has expressed that “the United States risks losing its status as a financial center in the long term, without clear rules on cryptocurrencies and a hostile environment from regulators. Congress must act soon to pass clear legislation “.
America risks losing it’s status as a financial hub long term, with no clear regs on crypto, and a hostile environment from regulators.
Congress should act soon to pass clear legislation. Crypto is open to everyone in the world and others are leading. The EU, the UK, and now HK. https://t.co/i9WeUZ7K6H
— Brian Armstrong (@brian_armstrong) February 16, 2023
It is a position shared by other great personalities in the crypto world such as Justin Sun, founder of TRON. In his opinion, Asia is becoming the great focus of crypto investments and the vast majority of investors in the sector are moving their money there.
Cameron Winklevoss, co-founder of Gemini and one of the first Bitcoin billionaires, Has expressed that “the next rise is going to come from the East”, repeating the idea that Asia is now the great hope of crypto investors.
30% of the crypto market is in Asia. Although the United States was the main market and the Middle East and Africa are considered to be the fastest growing, right now the most influential crypto market is South Asia and Oceania. According to a report by the firm Grand View Research, in 2022 30% of the income of the cryptocurrency sector came from that area.
Nor will it be free. Hong Kong is preparing new legislation for virtual asset service providers (VASPs), the name given to cryptocurrencies there. However, as Coindesk points out, it does not mean that they will be “completely legal for everyone”. This regulation will allow a broader framework for accredited investors, but not for retail investors, who will be excluded.
Do I anticipate a change in China? The plan is already attracting players like Huobi, the great exchange of Chinese origin and now in the hands of Justin Sun. These days it has applied for a license to start operating in Hong Kong. Like them, other crypto companies are moving to start their operations there.
Hong Kong wants to differentiate itself from China, but their future strategies could be linked. The crypto sector is not experiencing its best moments, but it is still a market with a huge economic pull. Measures like those in Hong Kong serve to attract foreign investment and it is a movement in which China may be interested.
Sun explains in an interview that Hong Kong is now seen as “one of the experimental zones for crypto development in China” and that “China is moving towards a more crypto-friendly policy.”
Openness to cryptocurrency to encourage the use of digital currencies. For years the Chinese market has been very restrictive with crypto trading, but there are already voices in the crypto world who believe that the great focus of growth in 2023 may be in China. At the moment, the Chinese authorities continue to defend their digital yuan.
Although the proposals of one and the other are different, what does seem clear is that the Asian administrations want to promote the use of these financial assets directly.
Image | manson yim
