TL;DR Breakdown
Hong Kong’s push to establish itself as a global hub for the digital-asset industry has drawn in cryptocurrency market data provider Kaiko, which has announced plans to move its Asian headquarters to the city from Singapore. The company feeds data to the likes of Deutsche Boerse and ICE Global Network.
The emergence of Hong Kong from Covid-related curbs, and its pro-crypto policy pivot, contributed to the decision to move, according to CEO Ambre Soubiran. He added:
With all of the recent changes and initiatives from the Hong Kong regulatory bodies, we realized that this is clearly where we have to be, where the capital is going to flow in, and where we are seeing a lot of attractiveness when it comes to hedge funds, investors and asset managers.
Kaiko’s move to Hong Kong underscores the city’s pivot toward fostering the digital-asset sector. Hong Kong is trying to develop crypto rules that will encourage growth and protect investors, while also seeking to learn lessons from bankruptcies like the FTX exchange.
The city plans to let retail investors trade larger tokens like Bitcoin and Ether later this year. A mandatory licensing regime for stablecoins, a type of crypto token that’s meant to hold a constant value, is due by 2023-2024.
The developments in Hong Kong contrast with a swinging crackdown on crypto in the US, where digital-asset firms are also increasingly cut off from the traditional banking sector after a trio of lenders collapsed. Singapore, meanwhile, has proposed tighter rules in the wake of the FTX wipeout.
Hong Kong’s “regulatory landscape is changing positively,” said Soubiran. She added that she wants to “make sure we can support that institutionalization and that kind of growth and establishment of the asset class in Hong Kong.”
Kaiko said its Head of Asia-Pacific, Sean Lawrence, will relocate from Singapore by the end of March. He said that figuratively “something like nine out of 10 people” in crypto are discussing returning to Hong Kong in some way.
Hong Kong is hoping that its pivot toward fostering the digital-asset sector will help restore its credentials as a cutting-edge financial centre after Covid-related curbs and political unrest sparked a brain drain.
The city’s Securities and Futures Commission (SFC) has taken a new approach to the crypto industry, which could benefit the crypto market and bring a new wave of capital to the largest digital assets in the ecosystem.
The virtual-asset industry remains in a deep downturn after a bubble in token prices deflated last year and investors fled. Exchanges Coinbase Global, Crypto.com and Huobi are among a slew of firms that have slashed thousands of jobs in the past few months.
Other companies are in a holding pattern as they await a crypto recovery and the final version of Hong Kong’s revamped digital-asset rules before deciding whether to commit scarce investment funds.
Despite the challenges, Kaiko’s move to Hong Kong is a positive development for the city and the crypto market. It’s likely to attract more players in the cryptocurrency market to Hong Kong, which is increasingly becoming a hub for digital assets.
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