Hong Kong welcomes crypto companies again, this time with more regulatory clarity.
It’s been almost a year since significant news has been released about the Chinese crypto community, as China’s covid lockdown made it difficult for anyone who doesn’t live in Asia to really understand its market, people, and general sentiment.
Pro-crypto excitement could be felt last week at the “Web3 Festival” held in Hong Kong. The big news was a major policy announcement from the Hong Kong government, indicating its desire to make the island a happy place for crypto companies to come and set up shop, within limits of course.
The crypto melt allowed players from CeFi, DeFI, NFT, Protocols and Gaming to come together and celebrate in that region. The conference was one of the largest ever held in Asia.
There was no shortage of new regulations announced last week, embodying the “One Country, Two Systems” mandate, through which Hong Kong remains a very important part of China, albeit with occasional political exceptions.
In the case of cryptocurrencies, while mainland China still bans cryptocurrencies, Hong Kong appears to have been given the green light to openly court and regulate the sector.
The Sun Sets in the West but Rises in the East
The contrast with the United States could not be more drastic. While Gary Gensler is cracking down on 2017 ICO-era projects like Algorand, Hong Kong officials suit up and take the stage at the Web3 Festival, where they express their commitment to cryptocurrencies and the broader asset space. digital.
As the West grows increasingly hostile towards cryptocurrencies, Hong Kong, following in Singapore’s footsteps, is relying on the new sector to revive its battered economy. Thus, Hong Kong hopes to attract crypto companies to open offices in the city and thus generate new tax revenue, talent and financial activity.
So far, both Huobi and OKX have announced plans to open branches in the city. A representative from Bitget, a rising star in the CEX space, said that they intend to follow suit as well.
Leaving or Staying, here is the Question
Opening up to web3 companies is one way to attract both companies and investors in crypto. Hashkey representatives informally commented that the goal of the policy is to bring web3 businesses into Hong Kong through ZA, a crypto-friendly neobank blessed by the Hong Kong government.
The government wants to make sure the industry is regulated and allowed to thrive, within limits. Above all, the Hong Kong government is always aware of how this will play out in Beijing, which, in the end, will either look the other way, or bring down the hammer.
Hong Kong will have a rough ride ahead of it to fight for crypto tax revenue. Its enemies include not only Singapore but also Dubai, which recently started issuing licenses for cryptocurrency exchanges. For example, Bybit has just opened its global headquarters in Dubai.
Unlike the US, though, Hong Kong is trying to quickly establish the rules of engagement. Without it, there is no crypto industry.
By Audy Castaneda
