Cryptocurrency investors and firms across Hong Kong are getting worried about the looming crypto industry two years after the COVID-19 pandemic struck the city.
Some entrepreneurs are aware that there is regulatory uncertainty in the imposed policies of the government. They hope that Hong Kong could slowly recover from its declining “crypto hub” status.
Hong Kong Regulations on Digital Assets Should Improve
(Photo : Anthony Kwan/Getty Images)
Many business firms are looking forward to what the Hong Kong government could offer them in terms of crypto business.
Before the pandemic, Hong Kong was a center of crypto business where many investors built their empires. That was before the COVID-19 era hit the city hard.
According to the South China Morning Post, it’s a popular spot for companies that specialize in crypto and NFT (non-fungible token) businesses.
However, with the change in the city’s regulations, investors are forced to look for another place for their investments. This is the reason why many of them seek friendlier crypto spots such as Dubai and Singapore.
For instance, Hong Kong used to hold Token2049, a premier conference involving the top crypto organizations and investors across Asia and Europe.
For the first time, it will take place in Singapore in the following days.
It’s now more difficult to establish a crypto business in the region since the government is requiring the companies to offer the service to people who have been earning at least HK$8 million or $1 million.
This is a part of a huge regulatory change in line with Hong Kong’s anti-money-laundering law. Crypto trading firms should get a license first before they start their operations in the city.
“A lot of the guys were in Hong Kong, but for one reason or another, they have moved to different places. Obviously, it’s a shifting world and crypto is very fluid, but part of that is a lack of clarity and a lack of the speed of things,” Aspen Digital CEO Yang He said.
Balance Between Regulation and Digital Asset Development
Virtual assets have been declining in Hong Kong since the regulation took its toll on them. Although a shift in policy is crucial for development, the administration should balance its position between the regulation and the development of the digital asset industry, per Bangkok Post.
For Token Bay Capital’s Lucy Gazmararian, what we exactly see today is a mere display of ecosystem movement in Hong Kong. If the other cities are supportive of the modern technologies that benefit the investors, it’s understandable why many businesses tend to seek more viable locations where they could thrive.
Additionally, Gazmararian noted that intention is missing in this discussion. It’s not yet too late to reposition the city as a center of Web3, but the government should take action so investors won’t stray away and invest here in the long run.
Indeed, a two-year battle with COVID-19 which still continues to date has immensely plagued the status of Hong Kong as a crypto hub. For others, the administration should remove the quarantine restrictions to attract businesses around the world.
If Hong Kong will listen to the sentiments of the crypto firms and investors, it could still revert to becoming a premier leader in the digital asset industry.
In other news, 84% of blockchain apps around the globe reportedly came from China, Tech Times wrote in its report last week.
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Written by Joseph Henry
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