The initial application period has already ended, and the number of applicants is the first indication of industry interest in Hong Kong's bid to become a global cryptocurrency hub with a new regulatory scheme, and the market is set to compete in this area. Some fear it will be too strict to maintain power. space.
Tony Tong, co-founder and co-chairman of the Hong Kong Blockchain Association, said after speaking at The Economist Impact's Technology for Change Asia conference this week that “the SFC has very strong regulation. I think there are,” he said. “I think it's very good that so many companies are coming to apply for licenses, but it hasn't been proven yet whether they will benefit from the licenses.”
Tong said he still believes in Hong Kong as a competitive arena because crypto companies can tap into mainland China's developer talent. Still, comparisons with similar regulations in Singapore are often drawn, as the two markets are seen as competing for much of the same business.
Angela Ang, a former regulator at the Monetary Authority of Singapore and current senior policy advisor at blockchain analytics firm TRM Labs, said she was initially surprised by the relatively low number of applicants on Thursday, but the He said it was natural considering the requirements.
“I think one of the differences with Hong Kong was that there was a requirement for an external evaluator to filter out companies that didn't have the budget or commitment,” Ang said.
“And there are RO requirements,” she added. “I think this is something very unique to Hong Kong. The ROs themselves have to be separately licensed and have a high degree of personal responsibility.”
Unlike Singapore, there is no clear indication of how many virtual asset platforms will be eligible for the one-year grace period given to virtual asset platforms already operating in the city by June 2023, Ang said. It pointed out. Singapore's MAS has given crypto companies one month to notify that they are existing operators and intend to obtain a license. According to a Bloomberg report at the time, about 70 companies have officially applied for licenses by the end of 2021, three times the number of applicants in Hong Kong to date.
One possible reason is that Hong Kong regulations could undermine the international competitiveness of crypto companies that use Hong Kong as a base of operations.
Alessio Quarini, co-founder and CEO of Hong Kong-based digital asset management company Hex Trust, said: “The limitations imposed by the framework limit the range of activities and services that we can provide to our clients. will be partially restricted.” “In particular, under the current regime, it is unlikely that VATP will be able to leverage its Hong Kong license to operate its global business competitively.”
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'Horrifying': Asian cryptocurrency scam defrauds tens of thousands of 'brainwashed' victims
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Blockchain analysis firm Chainalsysis said in an October report that crypto trading activity in Hong Kong is heavily skewed towards OTC services compared to other markets in the region.
While Singapore, Japan and other markets have sought competitiveness since Hong Kong announced its intention to become a crypto hub at the end of 2022 and bring back some businesses that had previously exited Hong Kong, Hong Kong Questions have arisen as to whether the regulation of their own policies is competitive enough.
Both Hong Kong and Singapore are on the right track, said Henry Chan, founder and CEO of Singapore-based tokenized asset firm DigiFT, who previously worked in the financial industry in Hong Kong and the mainland. He said that DigiFT already has a license in Singapore and plans to obtain a license in Hong Kong.
“There's always competition,” Chan said. “In my opinion, this is healthy competition…Regulators in both jurisdictions are embracing the evolution of the financial industry and fostering innovation.”
Alex Munson, head of SC Ventures at Standard Chartered, said he expects global cryptocurrency regulation to converge. He said it is ecosystems, not regulators, that compete with each other, but Asia currently has no clear jurisdictional advantage.
“both [Hong Kong and Singapore] That means the startup community, the Web3 actors, the capital dedicated to it, the investors putting capital into the asset class, etc.,” Munson said. “Regulators are doing things a little differently, but ultimately they're converging. So you can't say one has an advantage over the other.”
Additional reporting by Kelly Le and Xinmei Shen
