[TheGuru: Jung Deung Yong Reporter] As U.S. financial authorities strengthen their oversight of cryptocurrencies, Hong Kong is emerging as a haven for cryptocurrency companies. To reclaim its status as a financial hub, Hong Kong is attracting new entrepreneurs, technologists, and investors with its friendly cryptocurrency regulations.
According to industry insiders on the 7th, Hong Kong was a central hub for cryptocurrency companies in the early stages of the industry, with foreign entrepreneurs operating businesses like FTX, Crypto.com, and BitMEX.
However, as market volatility became uncontrollable, it imposed strict regulations on cryptocurrency activities to protect investors.
However, since the Hong Kong government legalized individual cryptocurrency trading in June last year, the heat has returned. Hong Kong implemented measures to regulate cryptocurrency-related activities, such as a sandbox for issuing stablecoins and a licensing system for cryptocurrency exchange operators. Recently, they even started trading Bitcoin and Ethereum spot ETFs.
More than 50,000 participants gathered at the Hong Kong Web3 Festival held mid-last month. Unlike last year, when most participants were Chinese, this year saw a noticeable increase in foreign participants. Cathie Wood, the founder of Ark Invest, gave a speech via video, and Vitalik Buterin, the founder of Ethereum, also appeared.
Such moves by the Hong Kong government starkly contrast with the U.S., which has taken a hardline stance on cryptocurrency companies. According to industry responses, the Hong Kong government’s precise regulation of cryptocurrency activities sets it apart from the U.S.
Jack Jia, the Head of Crypto at global payment company Unlimit, emphasized, “Not only does the U.S. Securities and Exchange Commission (SEC) not clearly inform which license to apply for, but it can also reject the application. On the other hand, Hong Kong financial authorities have prepared a process to hear companies’ opinions.”
Sergey Nazarov, co-founder of Chainlink, said, “Hong Kong is more open to the idea that capital markets and cryptocurrencies can coexist. Hong Kong is simultaneously issuing regulations on stablecoins and digital assets, which signifies that Hong Kong can be a place where assets and payments can operate stably in a regulated system.”
Some anticipate that Hong Kong may pave the way for China to accept cryptocurrencies in the future. Although China bans its citizens from trading cryptocurrencies, Hong Kong could become a new gateway.
Anurag Arjun, founder of modular blockchain company Avail, said, “Due to Hong Kong’s strategic characteristics, we believe it will be a crucial gateway to China. If China opens up and we have more conversations with government officials in the future, what we do in Hong Kong will provide useful lessons for expanding into China.”
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