The US government’s icy approach to cryptocurrency regulation could ultimately see the industry’s ‘center of gravity’ shift to Hong Kong, says Ambre Soubiran, CEO of institutional crypto market data provider Kaiko, based in Paris.
The United States has been at the forefront of the crypto industry for some time, however, with the government apparently taking a regulation-by-law enforcement approach, some increasingly feel that a significant numbers of companies, developers and investors will soon be flocking elsewhere. work in friendlier environments.
1 million tech jobs are at risk of going overseas. As the US heads down a path of regulatory uncertainty, the EU, UK, UAE, Hong Kong, Singapore, Australia and Japan are all creating enabling environments for crypto to thrive so that they can capitalize on the next wave of innovation. pic.twitter.com/2UMkFxajcM
—Coinbase (@coinbase) March 29, 2023
Speaking to The Wall Street Journal on April 1, Soubiran suggested that the recent crackdown on crypto in the United States will inadvertently help Hong Kong in its goal of becoming a major crypto hub:
“The United States being tougher than ever these days on crypto and regulating Hong Kong more favorably…will clearly shift the center of gravity of crypto asset trading and investment more towards Hong Kong.”
“We want to be where our customers are,” she added.
As the US government has become increasingly aggressive towards crypto since FTX collapsed in November – with senators like Elizabeth Warren even recently declaring they were building an “anti-crypto army” – Hong Kong has pushed in the other direction.
“This industry that we tried to destroy, which reached a value of a trillion dollars, and which grew by 30% when our banking system required a safety net of 2 trillion dollars, and in 10 years has added 10,000 American jobs…
Has no value or good qualities.
-The White House
— Ryan Selkis (@twobitidiot) March 21, 2023
The Hong Kong government initially outlined its plans in January to become a hub by rolling out progressive regulation to support high-quality crypto and fintech businesses in 2023.
While regulations are yet to be fully ironed out, Hong Kong’s Securities and Futures Commission (SFA) on Feb. 20 proposed a crypto licensing regime, focused on protecting consumers without stifling innovation.
So far, more than 80 virtual asset-related companies have expressed interest in locating there, according to a March 20 speech by Hong Kong Financial Services and Treasury Secretary Christian Hu.
He also noted that 23 crypto firms in particular have already indicated that they “plan to establish their presence.”
Adding to the positivity emerging from the Special Administrative Region of China, Bloomberg reported on March 28 that the Hong Kong Monetary Authority and SFA were set to plug a joint meeting on April 28 to help crypto firms establish national banking partnerships.
Make Hong Kong even better!!! 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 reportedly either started offering banking services to crypto firms in Hong Kong or have inquired with firms in cryptography.
Related: Hong Kong fund plans to raise $100 million for crypto investment
soubiran too revealed in mid-March that Kaiko herself is looking to move the headquarters of her Asia-Pacific unit from Singapore to Hong Kong, in response to the country’s crypto-friendly stance.
“What we are seeing is clear support for more clarity on the regulatory framework in Hong Kong,” she told Bloomberg in an interview, adding that “as we see increased attractiveness of Hong Kong in the region , we are relocating.”
Related: Asia Express: US and China Attempt to Smash Binance, SBF’s $40M Bribe Demand