Hong Kong is sticking with a plan to become Asia’s digital-asset capital despite the industry’s tarnished reputation, a stance drawing tentative interest from bruised crypto firms looking for paths to recovery.
The territory said that it would learn from the US$2 trillion crypto market rout and a spate of global bankruptcies, such as the collapse of the FTX exchange, to create a fresh regulatory framework that can protect investors and encourage growth.
The three-month-old pivot toward fostering a crypto sector is part of a wider effort to restore Hong Kong’s credentials as a financial center after COVID-19 curbs and political unrest sparked a brain drain.
Photo: Reuters
Hong Kong’s crypto plan includes a mandatory exchange licensing regime due in June and a consultation on allowing retail trading. Officials have also permitted exchange-traded funds (ETFs) and three such ETFs launched since mid-December last year have raised more than US$80 million.
However, digital-asset businesses have been retrenching of late, posing an obstacle to the territory’s push.
Matrixport Technologies Pte, a crypto lender with about 300 staff, is among the firms assessing Hong Kong’s evolving rulebook. Its home base of Singapore is now so wary of virtual coins that it might ban retail-token lending altogether.
Matrixport is already evaluating the possibility of setting up in Hong Kong, even as it awaits the outcome of a Singapore virtual-asset license application, people familiar with the matter said.
Gauging the likely return on the needed investment is difficult because Hong Kong’s rules are still evolving, the people said, asking not to be identified as the deliberations are private.
“Companies are interested in the prospective crypto regime, but also hesitant pending more details,” Bloomberg Intelligence ETF analyst Rebecca Sin said.
Sin pointed to longer-term potential for asset managers if a currently limited program allowing Chinese investors to buy some stock ETFs in Hong Kong is one day widened to span crypto. Bloomberg Intelligence estimates that total funds under management in Hong Kong ETFs might surpass US$50 billion by year-end.
Sin expects regulators to permit spot bitcoin ETFs as early as the second quarter of this year.
Samsung Asset Management, which this month launched the Samsung Bitcoin Futures Active ETF in Hong Kong, has said it might consider starting a spot fund if the territory gives it the green light.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS