Hong Kong attracts 24 applicants for crypto exchange permits

TWENTY-FOUR corporations utilized for licences to function digital-asset exchanges in Hong Kong, together with bigger gamers like Bybit, OKX and Crypto.com, as the town tries to develop a regulated hub for the business.

Gate.io, HTX and Bullish have been amongst others with notable buying and selling volumes to characteristic on the listing. Hong Kong imposed a Feb 29 deadline for purposes and platforms that haven’t submitted should stop providers by the tip of May.

The world’s largest alternate Binance was absent from the listing. So was Coinbase, the highest US platform, and Kraken, one other common buying and selling venue.

The crypto business will sift via the candidates to gauge the attract of Hong Kong as a digital-asset centre amid competitors from different jurisdictions. The metropolis’s nine-month-old virtual-asset rulebook prioritises investor safety, implying compliance prices that would pose an impediment for some companies.

‘Litmus test’

“The application list is the litmus test for industry sentiment,” mentioned Angela Ang, senior coverage adviser at blockchain intelligence agency TRM Labs. “It’s a good sign to see a number of well-known players in the mix. What Hong Kong really needs is a number of committed, sizable players to anchor its ecosystem.”

The key concern going ahead is to see how a lot corporations really make investments into the Hong Kong market, Ang added.

“Like in traditional financial services, there is definitely a cost in operating a regulated business,” mentioned Ding Chen, head of regulatory affairs at Bullish. “So we have factored that into overall strategy.”

Hong Kong pivoted in the direction of making a crypto hub in late 2022, a part of an effort to seem cutting-edge amid doubts in regards to the metropolis’s future. There are at present two authorised digital-asset exchanges, HashKey Exchange and OSL Group.

The evolving regulatory panorama will probably impression the way in which OSL constructs its enterprise, and prices are one thing that should be assessed, the corporate’s head of regulatory affairs Gary Tiu mentioned.

Crypto flows

Most of the estimated US$64 billion in crypto that flowed into Hong Kong within the yr via June did so in over-the-counter – or OTC – trades slightly than through digital-asset exchanges, in accordance with information from Chainalysis.

Small retailers dotted throughout the town that swap between money and digital belongings with few questions requested comprise one such OTC route. Regulators are cracking down on these shops beneath a plan outlined final month.

Hong Kong can be engaged on guidelines for stablecoins and is open to permitting exchange-traded funds that make investments instantly in choose cryptocurrencies. The authorities final month offered US$750 million of digital inexperienced bonds utilizing HSBC Holdings’s tokenisation platform. BLOOMBERG