Categories: MarketsMenafn

Hong Kong Witnesses Surge in Digital-Asset Exchange License Applications

Hong Kong is seeing a surge in license applications to operate digital-asset exchanges, with 22 companies, including prominent players such as Bybit, OKX, and Crypto.com, entering the fray.

This move is part of the city’s efforts to position itself as a regulated hub for the cryptocurrency industry. Other notable applicants with significant trading volumes include Gate.io, HTX, and Bullish. The deadline set by Hong Kong for these applications was Feb. 29, and platforms that failed to apply will have to halt their services by the end of May.

Binance, Coinbase, and Kraken fail to apply

Despite the interest from various entities, major exchanges like Binance, Coinbase, and Kraken have not applied for licenses, marking their absence from the list of applicants. This situation presents an opportunity for Hong Kong to gauge the attractiveness of its regulatory environment for digital assets amid competition from other jurisdictions.

Hong Kong’s virtual-asset rulebook introduced nine months ago, prioritizes investor protection. However, this approach may increase compliance costs, posing challenges for some businesses considering entry into this market. The city currently hosts two authorized digital-asset exchanges, HashKey Exchange and OSL Group, indicating a foundational structure for its crypto ecosystem.

It is important to understand that crypto transactions in Hong Kong include a significant volume of over-the-counter (OTC) trades, with an estimated $64 billion flowing into the city through such channels in the year through June, as reported by Chainalysis.

With that in mind, Hong Kong regulators are tightening controls on small shops facilitating crypto transactions and are exploring regulations for stablecoins and the possibility of allowing exchange-traded funds that invest in select cryptocurrencies.

Additionally, the government has ventured into digital finance by selling $750 million of digital green bonds using a tokenization platform provided by HSBC Holdings Plc.

Jerry Rolon

After working for 7 years as a Internet Marketer, Jerry now aims to explore the journalistic side of Internet. With his impeccable knowledge in this domain, he churns out some of the best news articles from the internet niche. With respect to acedamics, Jerry earned a degree in business from California State University.

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