Hong Kong: Another Crypto Exchange is Eyeing HK Base, Why?

Paigambar Mohan Raj
Source: PayBito

Independent Reserve, an Australian cryptocurrency exchange, is eyeing business options in Hong Kong. The move follows the city’s efforts to become a significant player in the digital asset space. According to Adrian Przelozny, the CEO of Independent Reserve, Hong Kong’s “friendly” licensing system makes it a desirable location for businesses. Przelozny stated that the firm eyes Hong Kong “as a good opportunity for Independent Reserve.” Additionally, he added that they are always looking for “new areas in Asia where we can expand our business.”

According to Przelozny, his team will visit Hong Kong next week. The team will speak with banks, authorities, lawyers, and compliance specialists to determine whether it would be appropriate to expand in the region.

Furthermore, regarding the region’s political ties with China, Przelozny asserted that Beijing may be experimenting with a more lenient crypto regulatory environment in Hong Kong. He thinks that if it is successful, China might follow suit.

However, Independent Reserve is not the only cryptocurrency firm looking at Hong Kong’s potential. Secretary for Financial Services and the Treasury, Christopher Hui stated that over 80 fintech companies had expressed interest in the region. These businesses included infrastructure providers, security firms for blockchain networks, and VA exchanges. Also, the list included Web3 initiatives, payment processors, and virtual currency wallets.

Why is Hong Kong gaining the interest of cryptocurrency firms?

The Hong Kong Securities and Futures Commission (SFC) issued a proposed licensing scheme for cryptocurrency exchanges on Feb. 20, 2023. If everything goes according to plan, the initiative will come into effect in June of this year.

Hong Kong-based crypto businesses will have to abide by several regulations relating to the safe storage of assets under the new licensing framework. AML, KYC, and counter-terrorist financing countermeasures are a few of the steps. Moreover, the rules will also include audits and disclosures of potential conflicts of interest.

Furthermore, Hong Kong allocated $50 million in this year’s budget to foster Web3 ecosystem development. Nonetheless, Hong Kong is fast becoming another major player in the cryptocurrency space. The region is already a significant player in the finance industry, therefore, it comes as no surprise, that they do not want to miss out on the digital asset realm.