Hong Kong Leads Asia’s Crypto Regulatory Evolution in 2023
Aside from Hong Kong, another country that has contributed significantly to the growth of the Asian crypto economy is Singapore.
As the curtain draws nearer towards the end of 2023, Hong Kong has emerged as a significant player in shaping the regulatory landscape for crypto assets in Asia, the Block reported on Tuesday.
Despite the many challenges faced in other jurisdictions around the world, there has been notable progress in the regulatory environment for the digital asset industry this year in the Asia-Pacific region, with Hong Kong leading the way.
Hong Kong Opens Its Borders for Crypto Licensing
The country opened its borders in June to start its crypto licensing regime. The move allowed crypto exchanges authorized to legally operate in the nation to offer retail products and services to traders and small investors.
So far, Hong Kong has greenlighted HashKey Exchange, a local digital asset service provider, to enter its market for retail traders. The company was the first exchange in the world to receive such approval, with OSL emerging as the second.
Four months later, in October, the country’s financial regulator, Hong Kong’s Securities and Futures Commission (SFC), revised its rules on activities related to virtual assets for intermediaries, expanding the scope of investors involved in crypto ETF participation.
Later in November, the financial watchdog issued two circulars to supervise the nation’s tokenization activities of digital assets. The country also announced its readiness to start accepting exchange-traded funds (ETFs) that track spot cryptocurrencies in December.
With its continued efforts to turn into a crypto hub for the Asian region, Christopher Hui, the Secretary for Hong Kong’s Financial Services and Treasury, said during a blockchain event in November that the government is committed to the growth of the Web3 economy.
“We have been asked many times whether JPEX will affect our determination to grow the web3 market,” Hui said. “The answer is a clear no,” he said.
Singapore’s Contributions to Asia’s Crypto Regulatory Growth
Aside from Hong Kong, another country that has contributed significantly to the growth of the Asian crypto economy is Singapore.
Over the past year, the country has attracted many foreign companies to establish their presence in the nation due to their crypto-friendliness. However, after the 2022 crypto winter, some companies, including Three Arrows Capital (3AC), entered into financial troubles due to liquidity issues.
Despite those hurdles, Singapore maintained its crypto-friendliness, with the country’s Monetary Authority of Singapore (MAS) continuing to grant approvals to crypto companies entering the market.
In 2023, crypto companies such as Coinbase and Circle Financials secured approvals to explore the market and offer digital asset services to customers in the region. Another firm, Gemini, also revealed plans in June to pursue licensing in Singapore as part of its expansion plans.
The country has also seen the likes of Grab, a ride-hailing company that is very popular in Southeast Asia, integrate crypto services, including NFT wallets, into its platform.
Taiwan, South Korea, and Japan
Hong Kong and Singapore are not the only countries in Asia helping to shape the regulatory environment in the region. Other countries such as Japan, South Korea, and Taiwan have contributed significantly to the growth of the ecosystem.
These countries have independently introduced a series of rules that aid the adoption of cryptocurrencies in their respective regions. For instance, Japan amended its Payment Services Act in June to include stablecoin-regulated laws for crypto users.
On the other hand, Taiwan is creating more regulatory frameworks for the emerging economy. Two months ago, in October, the country’s regulator proposed a drafted law for first reading, requiring crypto companies in the region to seek permission before operating in the nation.
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