The rising popularity of cryptocurrencies is undeniable on the global scale, but what also is undeniable is the fact that the adoption rate has not been en masse over the past few years.
This is especially the case for many large-scale institutions, hedge funds and many top-tier investors throughout Asia. This is largely due to several factors in trading platforms, including the lack of consistency, limited usability, security concerns, high fees, and sub-par consumer experience.
In Hong Kong, in particular, complaints about misappropriated assets and market manipulation led to the technical breakdown of several exchanges, which led regulators from the Securities and Futures Commission to step in and police the market, curbing potential fraud often associated with virtual currencies.
This puts market professionals, such as accountants and lawyers, in the position to ensure effective gatekeeping to prevent fraud and dubious fundraising activities, ensuring compliance with the law.
Blockchain as a High Priority
It is through the implementation of such regulatory actions that Hong Kong is seeking to gain the reputation to become an important international blockchain hub, and according to the fintech lead at InvestHK, “Blockchain is a very high priority for us. There is hype, and there is the fast grab of money with ICOs in some cases. But what we are looking at building here in Hong Kong is an infrastructure for new businesses and existing businesses, to make sure the technology and innovations remain a key enabler for financial sector growth.”
Projects from around Asia are setting up their infrastructure in Hong Kong, like the Japanese Messaging Giant LINE - who recently setup a $10 million fund.
BitMEX are renting the world’s most expensive offices in Hong Kong - sharing the building with financial giants Bank of America Corp, Barclays Plc, Bloomberg LP, Goldman SachsGroup Inc and the Securities and Futures Commission of Hong Kong, which is bringing legitimacy to the the industry in Hong Kong.
Another crypto-exchange launched in Hong Kong called Coinsuper, which has over 1 million users and up to 250 million USD in daily trading. They are focused on 'Fiat to crypto' and have recently launched an ecosystem that connects investors, authorities and blockchain innovation labs.
Cryptocurrency is not a Threat
The Financial Services and Treasury of Hong Kong recently released a report which sheds light on the fact that cryptocurrency is not a threat, despite the chaos surrounding its regulations.
“Hong Kong applies no capital gain tax to crypto investment, making it a huge incentive for investors and therefore boost the industry," says Michael Ou, CEO of CoolBitX. "I am excited to see Hong Kong become a crucial location for crypto-related activities and efforts.”
It was done in an effort for the general public to be aware that no specific regulation exists around cryptocurrency trading, and Money Service Operators licenses only have to be obtained for money services conducted in fiat currencies.
The government of Hong Kong is taking extra steps to educate the public on ICO and cryptocurrency investments, by reaching them through a variety of touchpoints. These touchpoints include their metro system, television, and social media.
The goal is to offer the public a comprehensive and holistic understanding of ICO and cryptocurrency investments following the rise in market interest, and each of these measures are showing signs of working as more citizens of Hong Kong are taking the next steps towards crypto.
The support of blockchain from the Hong Kong Government can clearly be seen. Recently, they created a special policy to expedite Immigration for Blockchain Job seekers - an important initiative to attract the best worldwide talent and aid projects which are currently based here.
