Hong Kong continues to assert itself in the global cryptocurrency market despite the crypto winter and stringent regulations imposed in China.
According to a Chainalysis report published on October 2, 2023, which ranked the top 10 countries for crypto adoption based on key metrics such as transaction value, retail transfers, and peer-to-peer (P2P) volumes, Hong Kong emerged as a prominent player in the crypto arena.
The region recorded approximately 64% billion in crypto transactions between July 2022 and July 2023. According to the reports, institutional cryptocurrency trades over $10 million account for around 50% of Kong Kong’s total annual trading volume. In comparison, smaller retail trades under $10,000 accounted for 4%, slightly below the global retail trading average of 4.7%.
These figures position Hong Kong as the fifth-largest cryptocurrency market in East Asia, following in the footsteps of other Asian regions like South Korea, Japan, Taiwan, and mainland China.
According to the report, Hong Kong achieved this feat because of a shift in the Chinese government’s stance towards cryptocurrency.
“As China and Hong Kong’s relationship becomes closer, some have theorized that Hong Kong’s development as a crypto hub may be an indication that the Chinese government is changing its position on digital assets, or at the very least is becoming more receptive to crypto efforts,“
the report stated.
Nevertheless, the Hong Kong government has also taken proactive measures to foster crypto adoption in the region. Notably, Hong Kong’s Securities and Futures Commission (SFC) encouraged crypto trading platforms to obtain licenses and comply with its new regulatory framework for cryptocurrencies, which came into effect in June 2023.
The Hong Kong Monetary Authority (HKMA) has also urged banks in the region to offer their services to cryptocurrency firms. The central bank advised financial institutions to stay vigilant about market developments and adopt a forward-thinking approach towards emerging sectors such as cryptocurrencies.
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