Hong Kong is reportedly making efforts to position itself as a global hub for Bitcoin and other cryptocurrency-related businesses by facilitating banking and financing services for these firms. According to Bloomberg, this move is aimed at attracting more cryptocurrency businesses to set up operations in Hong Kong and drive economic growth in the region.
Hong Kong’s popularity as a hub for cryptocurrency businesses is not new. In the early days of the cryptocurrency boom, Hong Kong was a major player, with a number of exchanges and startups calling the city home. However, as China clamped down on cryptocurrencies, many companies began looking for friendlier jurisdictions. Singapore and Dubai emerged as popular destinations for these businesses, while Hong Kong’s position as a hub for cryptocurrency-related businesses began to wane.
However, things are changing. According to a report by The Wall Street Journal, more than 20 companies are preparing to relocate their headquarters to Hong Kong, with about 80 companies considering doing the same. Most of these companies are based in mainland China, Singapore, Europe, and Canada.
Among the companies looking to move to Hong Kong is Kaiko, an on-chain data analytics company. Its CEO, Amber Subieran, stated that one of the reasons for moving to Hong Kong is that Chinese institutional investors are getting into the cryptocurrency market. Subieran also noted that the US has been too strict about cryptocurrencies lately, while Hong Kong is on a much more friendly path.
The Hong Kong financial authorities have decided to introduce a cryptocurrency license in June, making it an attractive location for businesses looking to enter the digital asset market. As a result, financial institutions in mainland China are rushing to prepare to launch cryptocurrency businesses based in Hong Kong. This is an important development, as China’s ban on cryptocurrencies in the mainland means that it is using Hong Kong channels to strengthen the digital asset market and cryptocurrency investment.
Ben Zow, CEO of Bybit, a cryptocurrency exchange, said that liquidity is the most important thing in the exchange business, and Hong Kong has abundant liquidity coming from institutional investors. This makes the city an attractive location for businesses targeting institutional investors.
Despite the ban on cryptocurrencies in the mainland, Chinese state-owned enterprises are also showing interest in cryptocurrency venture capital. Vivian Wang, Director of New Huo Asset Management, said that her company has met with over 200 Asian investors over the past three months, and they have shown a favorable attitude towards investing in Web3 companies.
The shift towards Hong Kong as a hub for cryptocurrency-related businesses is a significant development. As the digital asset market continues to grow, it remains to be seen whether Hong Kong will emerge as the dominant hub for cryptocurrency-related businesses in the region. However, with the introduction of a cryptocurrency license and the interest from Chinese institutional investors and state-owned enterprises, the signs are certainly positive.
