Hong Kong Gives the Stamp of Approval on Crypto Trading, Bitcoin Rises
Key takeaways
- Hong Kong authorities have said crypto exchanges can apply to trade for retail investors as early as June
- Bitcoin prices rose 1.7% at the news
- The move is set to push Asia as a crypto hub amid growing calls for regulation in the West
Hong Kong has announced it’s opening its doors to crypto trading platforms as early as next week. The move comes as the country looks to become a crypto hub while regulating at the same time, learning from the mistakes of other countries that have seen spectacular crypto company implosions. Keep reading to learn more about the crypto development and the market reaction.
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What’s happening in Hong Kong?
The Hong Kong Securities and Futures Commission (SFC) announced this week it would begin accepting applications from crypto exchanges to offer trading to retail investors only from as early as June 1.
The Hong Kong financial regulatory body has already licensed crypto platforms OSL and Hash Blockchain, with more to come in the coming months. The platforms must act within the SFC’s proposed guidelines, including cybersecurity standards and client asset segregation to avoid an FTX-style fallout.
The news isn’t a surprise — Hong Kong had already put out a public consultation on proposed regulatory requirements for crypto trading in February. But the move sharply contrasts the Chinese government’s policy, which banned crypto in 2021, and shows Hong Kong’s intention to become a crypto hub in Asia amid growing calls for regulation from the West.
The crypto market’s reaction
The news meant Bitcoin rose 1.7% to $27,293 while Ethereum rose 2% to $1,851. Unfortunately, the gains were short-lived as the UK CPI results and ongoing uncertainty around the US debt-ceiling crisis hammered the price. At the time of writing it’s now $26,139, while Ethereum has dropped back to $1,795.
The initial rise indicates investor confidence in Hong Kong’s long-term plan towards crypto assets. At a time when the US’ regulatory body, the SEC is hounding crypto companies, Asia could become a safe haven for crypto investors and companies while the country’s economy benefits from the influx in business.
The bottom line
The Hong Kong crypto news is a win-win: Hong Kong gets crypto companies that fit their safety guidelines while crypto companies have a friendly country to operate in. It’s good news for crypto investors too, which gives crypto hope in the long run.
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