• Hong Kong’s Securities and Futures Commission (SFC) has taken a new approach to the crypto industry, which could bring a new wave of capital to the largest digital assets in the ecosystem.
• Kaiko suggests that Asia appears to be positioning itself at the forefront of the next digital asset revolution by welcoming crypto business.
• The influx of new capital into Hong Kong and Asia could mean economic growth for the region and Asian exchanges.
Hong Kong’s Crypto Industry Regulations
Hong Kong’s Securities and Futures Commission (SFC) has taken a new approach to regulating the nascent crypto industry. This fresh outlook could benefit both the cryptocurrency market and attract more capital investments into the largest digital assets on offer in the ecosystem. On Monday, it became clear that Hong Kong is ready to open its doors to trading cryptos in Asia, a move that stands out from other enforcement actions taken by other countries such as the United States’ SEC.
Asian Crypto Revolution
Digital asset market data provider Kaiko weighed in on this matter in their blog post, suggesting that Asia is taking up an advantageous position at what appears to be at the vanguard of yet another digital asset revolution – one that welcomes crypto businesses with open arms. Kaiko Research Analyst Conor Ryder said: “An enticing East could well be the next catalyst that propels crypto prices upwards, with some proclaiming that this run has already started, propelled by an Asian-linked token rally”.
The Reason Behind The Change Of Heart
After a turbulent year filled with low prices and exchange debacles such as FTX, why are jurisdictions like Hong Kong now loosening their regulatory policies regarding cryptocurrencies? Kaiko analyst Conor Ryder believes it may have something to do with recent enforcement action from US regulators – making now seem like an opportune moment for Hong Kong to strike while everyone is looking away. Data compiled by Kaiko reveals how Asian exchanges were among those who benefited most from 2021’s bull run — though since China outlawed cryptos at end of 2021 activity has been considerably dampened compared to other regions due to Binance’s reduced trading volumes there.
Eligible Cryptocurrencies Under SFC Proposals
Under SFC proposals eligible cryptocurrencies must meet certain criteria before being traded on approved indices — these include being part of ‘the largest cap virtual assets’ listed therein; perpetual futures markets responded positively when they realized this meant renewed flows from Asia would soon be incoming again.
The fresh regulations laid out by Hong Kong’s SFC may well prove beneficial for both investors seeking returns as well as economies across Europe or North America who may take advantage of increased trading activities between themselves and Asia — not least because greater liquidity often leads lower spreads which can benefit all traders involved regardless if they are long or short term invested in any given asset class or instrument type.