US Crypto Regulations To Shift Industry To Hong Kong

As the US government adopts a stringent stance on crypto regulation, experts believe that the industry’s focal point may move toward Hong Kong. Ambre Soubiran, CEO of Kaiko, a Paris-based institutional crypto market data provider, shared her insights on the matter.

The United States has led the cryptocurrency sector for some time, but its recent regulation by enforcement approach could push companies, developers, and investors to seek more favorable environments.

In an interview with the Wall Street Journal, Soubiran suggested that the US crackdown on cryptocurrency might rashly aid Hong Kong’s quest to become a major crypto hub.

“The U.S. being more stringent these days than ever on crypto and Hong Kong regulating in a more favorable way…is going to clearly shift the center of gravity of crypto assets trading and investments more towards Hong Kong.”

Contrary to the US government’s increasing aggression towards cryptocurrency following FTX’s failure in November, Hong Kong has taken a more supportive approach.

In January, the government of Hong Kong announced its plan to become a center for cryptocurrency and fintech companies by introducing helpful rules in 2023.

Hong Kong’s Crypto-Friendly Initiatives Attract Firms

While the regulation details are still being completed, the Securities and Futures Commission (SFA) of Hong Kong suggested a crypto licensing regime on February 20, aimed at offering customer protection without stifling innovation.

Over 80 virtual asset firms have shown interest in establishing a presence in the region, as mentioned by Christian Hu, Hong Kong’s Secretary for Financial Services and the Treasury, in a March 20 speech.

Furthermore, 23 cryptocurrency firms have specifically suggested plans to set up operations in Hong Kong. The Hong Kong Monetary Authority and SFA will boost the positive outlook by holding a joint meeting on April 28 to help crypto firms team up with local banks.

Make Hong Kong Great Again!!! pic.twitter.com/K8FV55R1cb

— Arthur Hayes (@CryptoHayes) March 28, 2023

Chinese banks such as Shanghai Pudong Development Bank, Bank of Communications Co., and Bank of China Ltd. have either started offering banking services to cryptocurrency firms in Hong Kong or made inquiries with crypto-related companies.

Soubiran revealed in mid-March that Kaiko intends to relocate its Asian-Pacific unit’s headquarters from Singapore to Hong Kong due to the country’s crypto-friendly stance.

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In an interview with Bloomberg, she said she strongly supports having clearer rules in Hong Kong. She also confirmed that Kaiko is moving there because it is becoming a more attractive place.