Hong Kong Emerges as Leading Virtual-Asset Hub in East Asia Amid Rapid Cryptocurrency Growth
Hong Kong's Cryptocurrency Rise
According to the latest Global Cryptocurrency Adoption Index published by Chainalysis, Hong Kong has made significant strides in its cryptocurrency activity, jumping to 30th place from 47th in the previous year. This remarkable climb is attributed to an 85.6% year-on-year increase in cryptocurrency transaction value. The city is positioning itself as a virtual-asset hub, enhancing institutional adoption through a clear regulatory framework.
Regulatory Framework Boosting Growth
Hong Kong's regulators have showcased decisiveness in establishing a regulatory framework that fosters institutional cryptocurrency adoption. Following governmental support for virtual assets in 2022, the introduction of licensing requirements for cryptocurrency exchanges in June 2023 has paved the way for significant developments, including exchange-traded funds that directly invest in cryptocurrency tokens.
Challenges in Mainland China
In stark contrast, Mainland China has experienced a decline in cryptocurrency activity, primarily due to stringent government regulations, including a ban on initial coin offerings and the closure of cryptocurrency exchanges.
Public Sentiment Towards Cryptocurrency
Chinese citizens are increasingly turning to over-the-counter (OTC) platforms as a mechanism for wealth preservation and asset movement. According to Ben Charoenwong, a finance professor, the negative sentiment towards China’s economy has led to a rise in OTC crypto activities that offer quicker methods for money transfer.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.