In accordance with a Bloomberg report, Hong Kong has obtained functions from 24 corporations looking for licenses to function crypto exchanges within the metropolis because it strives to ascertain itself as a regulated hub for the cryptocurrency business.

Notable gamers equivalent to Bybit, OKX, and Crypto.com are among the many candidates, whereas Binance, Coinbase, and Kraken are absent. Nevertheless, the town’s digital asset rulebook, which prioritizes investor safety, comes with compliance prices that might be difficult for some corporations.

Binance, Coinbase Omit Hong Kong’s Crypto License Race

Per the report, the listing of candidates consists of well-known gamers within the digital asset house, equivalent to Gate.io, HTX, and Bullish, which have demonstrated notable buying and selling volumes. Nonetheless, the absence of main exchanges like Binance, Coinbase, and Kraken raises questions on their strategic choices concerning Hong Kong.

The listing of candidates serves as a gauge of business sentiment, indicating the boldness degree in Hong Kong’s regulatory framework. Angela Ang, senior coverage advisor at blockchain intelligence agency TRM Labs, sees the presence of acknowledged gamers as a optimistic signal.

Notably, Hong Kong’s 24 candidates for alternate licenses lag considerably behind Singapore, the place some 70 corporations have officially applied for a license by the top of 2021, 3 times the variety of candidates in Hong Kong up to now.

Nevertheless, the true measure of Hong Kong’s success will rely on the investments these corporations make within the native market. Compliance prices related to working a regulated enterprise within the digital asset business are inevitable and should be factored into long-term methods.

OTC Buying and selling Dominates Crypto Inflows In Hong Kong

The report notes that Hong Kong has shifted its focus to turning into a cryptocurrency hub in late 2022, aiming to showcase its technological capabilities and safe its future. Presently, HashKey Change and OSL Group are the town’s solely licensed digital asset exchanges.

Nevertheless, most digital flows into Hong Kong have occurred over-the-counter (OTC) buying and selling reasonably than digital asset exchanges. Chainalysis information reveals that round $64 billion of crypto entered Hong Kong by OTC channels final yr.

The federal government reportedly needs to manage OTC shops that facilitate cash-to-crypto transactions with minimal oversight. As well as, Hong Kong is exploring rules for stablecoins and contemplating introducing exchange-traded funds (ETFs) that make investments instantly in chosen cryptocurrencies.

General, the continuing growth of Hong Kong’s digital asset alternate sector and the inflow of functions for working licenses replicate the town’s ambition to develop into a regulated hub for the cryptocurrency business.

Nevertheless, the compliance prices related to working a regulated enterprise pose challenges that corporations should contemplate.

In gentle of this newest growth, Bitcoinist beforehand reported that HTX has withdrawn from its efforts to safe a cryptocurrency alternate license in Hong Kong. In accordance with the report, three different cryptocurrency alternate operators have additionally withdrawn their functions.