China’s autonomous special administrative region – Hong Kong – reportedly aims to legalize cryptocurrency retail trading and emerge as a digital asset hub.
According to the Co-Founder of BitMEX – Arthur Hayes – the state’s vision and crypto adoption could propel a new bull market.
What Is on the Agenda?
A recent coverage by Bloomberg informed that Hong Kong’s authorities could enforce a friendly regulatory framework on cryptocurrencies in March 2023. Specifically, regulators could enable crypto retail trading and allow listings of leading digital assets. The details remain unknown since they will be the subject of public consultation beforehand.
The Hong Kong government is also expected to announce intentions to become a global crypto hub during a fintech conference that starts next week.
“Introducing mandatory licensing in Hong Kong is just one of the important things regulators have to do. They can’t forever effectively close the needs of retail investors,” commented Gary Tiu – Executive Director at BC Technology Group Ltd.
Hong Kong’s positive view on cryptocurrencies significantly contrasts with China’s position. The world’s most populous country imposed a total ban on all digital asset operations last year, causing multiple companies to move abroad.
Another country in the South East Asian region that changed its stance toward the crypto sector is Singapore. The city-state was among the leading blockchain centers prior to the Terra collapse. After the crash, though, it imposed strict regulations to limit similar cases.
The country’s financial regulator proposed earlier this week that retail investors should be unable to borrow funds for buying or trading digital currencies.
Hong Kong’s Position Could Change the Trends
Hong Kong has gradually turned its focus toward the digital asset industry in the past several months. A recent study determined it is the most crypto-ready nation in 2022, surpassing the USA and Switzerland. The friendly taxation rules, the number of crypto ATMs, and the interest displayed by the local population were the factors granting Hong Kong the first position.
Despite its small size, China’s administrative region seems to have a huge impact on the entire industry. The American entrepreneur and Co-Founder of BitMEX – Anthony Hayes – thinks the next bull run will occur once China and Hong Kong “love crypto” again:
“Hong Kong’s friendly reorientation towards crypto portends China reasserting itself in the crypto capital markets. When China loves crypto, the bull market will come back. It will be a slow process, but the red shoots are budding.”
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