Hong Kong: Asia’s Rising Cryptocurrency Hub

Singapore may be Asia’s eminent fintech hub, but as far as cryptocurrencies are concerned, it looks like Hong Kong is giving it a serious run for its money.

According to the South China Morning Post, the Pearl of the Orient is fast becoming one of the world’s leading cryptocurrency hubs thanks to the recent barrage of Hong Kong-based ICOs. However, there are some concerns:

“…evangelists for cryptocurrencies see ICOs as a way for Hong Kong to regain its place at the forefront of the Asian, and even the global, financial services industry.

The stakes are high. The ICO market remains frothy at best, with investors concerned about scams, so companies have to go to great lengths to prove they are genuine. And with anything so new, market participants worry that one spectacular failure could bring the whole thing crashing down.”

Worries aside, there’s actually little to stop Hong Kong from rising to the top of the crypto hub foodchain. China has banned ICOs and Macau has recently barred banks from participating in them. As for Singapore, its regulator’s moves against token sales have turned its citizens into ICO pariahs, all but excluded from the majority of coin offerings. That leaves Hong Kong as the only game in town.

Granted, Hong Kong’s Securities and Futures Commission (SFC) did voice some of its concerns about ICOs recently, but that hasn’t stopped the former colony from hosting a slew of token sales. The SCMP says that it has between 10 to 20 ICOs slated over the next six months, and apparently, their investor base is growing. Here’s more:

“I think Hong Kong is probably the best place in Asia to do a token sale right now,” said Jehan Chu, managing partner at Kenetic Capital, a Hong Kong based a blockchain and crypto currency investment firm.

“Everything you need is here. We have the procedures set up, and we’ve shown they work on successful token sales. There are advisers here and plenty of investors,” he said.

As optimistic as he is though, Chu only sees two ways for Hong Kong going forward:

“There are two possible ways forward for token sales in Hong Kong,” said Chu. “The first is that things continue as they are, with the throttle at 150 per cent, and Hong Kong becomes a real centre for cryptocurrencies.

“The second is that there is a black swan event, for example a big token sale turns out to be a scam, and either the Hong Kong or mainland Chinese authorities step in and regulate the whole process much more strictly. Things would still continue, as there is utility in token sales and cryptocurrencies, but much more slowly than they are at present.”

Photo: Mark Lehmkuhler