FILE PHOTO: Representations of cryptocurrencies are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
Hong Kong: Hong Kong and Singapore are the front-runners in a push by Asian governments to become cryptocurrency hubs as they look to capitalise on the global resurgence of the sector thanks to the support of US President Donald Trump.
Bitcoin recently hit a record of close to US$110,000 while others have also rallied on the back of Trump’s pro-crypto promises.
With forecasts that they could rise further, governments are keen to get a piece of the action.
Hong Kong regulators said Wednesday that the city needed to tap “global liquidity” and laid out plans including the possibility of offering riskier crypto products such as derivative trading and margin financing.
“The one word that we need to think about always is liquidity,” Eric Yip, an executive director at the Securities and Futures Commission (SFC), said at an industry conference in the financial hub.
“How do you bring liquidity to this market, hence commercial value, hence ecosystem?”
The collapse of exchange FTX in 2022 took along with it around US$8bil from customers who used it to buy, sell and store cryptocurrencies.
The funds were later recovered, but regulators around the world are anxious to avoid a repeat, and the sector has since moved away from its freewheeling, anti-establishment origins to embrace regulation.
Officials stress the need for investor protection while still hoping their rules will be business-friendly.
“There was a lot more scrutiny two or three years (ago), right after FTX. Regulators want to make sure that they do the proper due diligence,” said Hong Fang, president of another exchange, OKX.
Officials in Malaysia and Thailand are mulling crypto-related policy shifts, while Japan, South Korea and Cambodia have made incremental moves, according to Bloomberg News.
But Hong Kong and Singapore, along with Middle East standout Dubai, cemented their front-runner status during a period when US regulators under Joe Biden’s administration were sceptical toward crypto.
In an executive order last month, Trump – who has pledged to make the United States the “crypto capital of the planet” – said he will instead provide “regulatory clarity and certainty” to support blockchain and digital asset innovation.
Animoca Brands group president Evan Auyang said the anticipation surrounding a new US playbook is a game changer and will influence regulators worldwide.
Singapore’s Monetary Authority has issued “Major Payment Institution” licences in relation to digital payment tokens to 30 companies, including OKX, which it added last year.
The city-state has had a head start in regulating digital assets, including with efforts such as the 2022 Project Guardian that brought regulators together with major global banks to explore asset tokenisation. — AFP
