Ambre Soubiran, chief executive of Kaiko, a Paris-based provider of institutional cryptocurrency market data, said the U.S. government’s lukewarm approach to cryptocurrency regulation could eventually shift the industry’s “center of gravity” to Hong Kong.
The United States has been at the forefront of the crypto space for some time now. However, as the government appears to be adopting a law-enforcement-while-regulation approach, there is a growing sense among some that large numbers of companies, developers and investors will soon flock elsewhere to work in a more hospitable environment.
In an interview with The Wall Street Journal on April 1, Soubiran said that the U.S.’s recent crackdown on cryptocurrencies will inadvertently help Hong Kong achieve its goal of becoming a major cryptocurrency hub: “Today, the U.S. regulates cryptocurrencies more stringently than ever before, and Hong Kong regulates them in a more favorable manner...will obviously shift more of the focus of crypto asset trading and investment to Hong Kong.” "We want to be where our customers are," she added.
Since the FTX crash in November 2022, the U.S. government has become increasingly hawkish towards cryptocurrencies, with Senator Elizabeth Warren even recently stating that they are building an "anti-cryptocurrency army." However, Hong Kong has been moving in the other direction.
In January, the Hong Kong government initially outlined plans to become a cryptocurrency hub by rolling out progressive regulations to support high-quality cryptocurrencies and fintech companies by 2023.
While the regulations are not yet fully in place, Hong Kong’s Securities and Futures Commission (SFC) proposed a crypto licensing regime on Feb. 20 that aims to provide consumer protection without stifling innovation. So far, more than 80 virtual asset-related companies have expressed interest in setting up shop there, according to a March 20 speech by Hong Kong’s Secretary for Financial Services and the Treasury, Hu Jintao.
He also noted that 23 cryptocurrency companies in particular have indicated that “they plan to establish their presence.” Adding to the positive sentiment from China’s special administrative region is Bloomberg’s March 28 report that the Hong Kong Monetary Authority and the SFA will hold a joint meeting on April 28 to help cryptocurrency firms form domestic banking partnerships. According to reports, Chinese banks such as Shanghai Pudong Development Bank, Bank of Communications, and Bank of China have begun providing banking services to or consulting with crypto companies in Hong Kong.
Soubiran also revealed in mid-March that Kaiko was considering moving the headquarters of its Asia-Pacific division from Singapore to Hong Kong in response to the country’s crypto-friendly stance. "What we're seeing is clearer support for Hong Kong's regulatory framework," she said in an interview with Bloomberg. "
