The US government’s icy approach to regulating cryptocurrency could ultimately see the industry’s “center of gravity” shift to Hong Kong, says Ambre Soubiran, chief executive of data provider Paris-based institutional crypto market Kaiko.
The United States has been at the forefront of the crypto sector for quite some time, however, with the government seemingly taking a regulation-by-enforcement approach, some are increasingly feeling that a significant number of companies, developers, and investors will soon flock to other places. to work in friendlier environments.
1 million tech jobs are at risk of going overseas. As the US moves down a path of regulatory uncertainty, the EU, UK, UAE, Hong Kong, Singapore, Australia and Japan are creating environments for crypto to thrive so 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 He suggested that the recent US cryptocurrency crackdown will inadvertently aid Hong Kong in its goal of becoming a major cryptocurrency hub:
“The US is stricter than ever on cryptocurrency these days and Hong Kong regulates in a more favorable way…it is clearly going to shift the center of gravity of crypto asset trading and investment more towards Hong Kong.”
“We want to be where our customers are,” he added.
While the US government has become increasingly aggressive towards crypto since FTX’s collapse in November, with senators like Elizabeth Warren even recently declaring that they are building an “anti-crypto army”, Hong Kong has been pressing in the other direction.
“This industry that we have been trying to destroy, has grown to a trillion dollar value, and rebounded 30% as our banking system required $2 trillion of support, and in 10 years added 10,000 American jobs…
It has no value or good qualities.”
-The White House
—Ryan Selkis (@twobitidiot) March 21, 2023
The Hong Kong government initially outlined plans in January to become a hub by implementing progressive regulation to support high-quality crypto and fintech companies by 2023.
While the regulation has yet to be fully resolved, the Hong Kong Securities and Futures Commission (SFA) proposed a crypto licensing regime on Feb. 20, focused on providing consumer protection without stifling innovation.
So far, more than 80 virtual asset-related companies have expressed interest in setting up shop there, according to a March 20 speech by Hong Kong Treasury and Financial Services Secretary Christian Hu.
He also noted that 23 crypto companies in particular have already indicated that they were “planning to establish their presence.”
Adding to the positivity emerging from China’s special administrative region, Bloomberg reported on March 28 that the Hong Kong Monetary Authority and the SFA are prepared to hold a joint meeting on April 28 to help crypto companies establish national banking associations.
Make Hong Kong great again! 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 started offering banking services to crypto companies in Hong Kong or have consulted with crypto companies.
Related: Hong Kong Fund Plans to Raise $100 Million for Crypto Investment
They will also rise revealed in mid-March that Kaiko itself is looking to move the headquarters of its 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,” he told Bloomberg in an interview, adding that “as we see Hong Kong’s increased appeal in the region, we are relocating.”
Related: Asia Express: US and China Try to Squash Binance, SBF’s $40M Bribery Claim
