The US government’s frosty approach to cryptocurrency regulation could eventually lead to the industry’s “center of gravity” shifting to Hong Kong, according to Ambre Soubiran, CEO of Paris-based institutional cryptocurrency data provider Kaiko.
The U.S. has been at the forefront of the crypto sector for some time, however, with the government seemingly passing regulation through a coercive approach, there is a growing sense by some that a significant number of companies, developers, and investors will they soon flock elsewhere to work in friendly environments.
1 million tech jobs are at risk of going overseas. As the US navigates the path of regulatory uncertainty, the EU, UK, UAE, Hong Kong, Singapore, Australia, and Japan are creating the environment for cryptocurrencies to flourish to take advantage of the next wave of innovation. pic.twitter.com/2UMkFxajcM
— Coinbase (@coinbase) March 29, 2023
Speaking to the Wall Street Journal on April 1, Soubiran suggested that the recent crackdown on cryptocurrencies in the US will inadvertently help Hong Kong in its goal of becoming a major crypto hub:
“The US is stricter than ever on crypto these days and Hong Kong is regulating more favorably… it will clearly shift the center of gravity of crypto asset trading and investment more towards Hong Kong.”
“We want to be where our clients are,” she added.
While the US government became increasingly aggressive according to crypto since the collapse of FTX in November — with Senators such as e.g Elizabeth Warren even recently stated to build an “anti-crypto army” – Hong Kong was pushing in the other direction.
“This industry that we are trying to destroy has grown to a trillion dollars in value, and which has grown by 30% because our banking system required a $2 trillion backstop, and in 10 years has added 10,000 American jobs…
It has no value or good qualities.”
– The White House
— Ryan Selkis (@twobitidiot) March 21, 2023
Hong Kong Government of the originally planned plans in January to become a hub by introducing progressive regulation to support high-quality crypto and fintech firms in 2023.
While the regulation has yet to be fully ironed out, Hong Kong’s Securities and Futures Commission (SFA) proposed a cryptocurrency licensing regime on February 20, focused on providing consumer protection without stifling innovation.
So far, it has had more than 80 virtual firms associated with the property expressed interest in opening a storeaccording to a March 20 speech by Hong Kong Financial Services and Treasury Secretary Christian Hu.
He also noted that 23 crypto firms in particular have already indicated that they “plan to establish a presence.”
Adding to the positivity emerging from the Special Administrative Region of China, Bloomberg reported on March 28 that the Hong Kong Monetary Authority and the SFA were ready to wait joint meeting on April 28 to help crypto firms establish domestic banking partnerships.
Make Hong Kong great again!!! pic.twitter.com/K8FV55R1cb
— Arthur Hayes (@CryptoHayes) March 28, 2023
Chinese banks such as Shanghai Pudong Development Bank, Bank of Communications Co. and Bank of China Ltd., are said to have started providing banking services to crypto firms in Hong Kong or inquired with crypto firms.
Related: Hong Kong fund plans to raise $100 million for crypto investments
They will also rise discovered in mid-March when Kaiko itself wants to move the headquarters of its Asia-Pacific unit from Singapore to Hong Kong, in response to the country’s crypto-friendly attitude.
“What we’re seeing is clear support for more clarity on the regulatory framework in Hong Kong,” she told Bloomberg in an interview, adding that “while we see Hong Kong’s increased appeal in the region, we’re shifting.”
Related: Asia Express: US, China try to crush Binance, SBF’s $40 million bribe demand