• Hong Kong’s Securities and Futures Commission (SFC) is taking a new approach to regulating the crypto industry.
• This could benefit the crypto market, bringing in more capital from Asia.
• Kaiko Research Analyst Conor Ryder suggests that an influx of new capital into Hong Kong and Asia could mean economic growth for the region and Asian exchanges.
Hong Kong’s Regulatory Approach to the Crypto Industry
Hong Kong’s Securities and Futures Commission (SFC) has taken a new approach to the crypto industry. This new way to regulate the nascent sector could benefit the crypto market and bring a new wave of capital to the largest digital assets in the ecosystem. On Monday, Hong Kong made clear its intentions to open the door to crypto trading in the Asian region in what appears to be a completely different approach to the enforcement actions taken by the U.S. Securities and Exchange Commission (SEC).
Why Is Asia Welcoming The Crypto Industry?
Digital asset market data provider Kaiko weighed in on the matter in a recent blog post, suggesting that Asia appears to be positioning itself at the forefront of the next digital asset revolution by welcoming crypto business. Kaiko Research Analyst Conor Ryder said: An enticing East could well be the next catalyst that propels crypto prices upwards, with some proclaiming that this run has already started, propelled by an Asian-linked token rally.
Impact Of The Regulatory Changes On Asian Exchanges
Data compiled by Kaiko shows that Asian exchanges benefited most from 2021 bull run but since China outlawed digital assets at end of 2021, Asia has significantly lagged behind other regions when looking at Binance’s trading volumes. According to SFC’s proposal they will allow trading in “largest cap virtual assets” included in at least two approved indices.
The Perpetual Futures Market Reacts Positively To The News
The perpetual futures markets reacted positively to news such as listed tokens being able see renewed flows from Asia, with open interest in Bitcoin Cash, Litecoin, and Polkadot increasing immediately after announcement was made public.
Overall it is clear that regulatory changes are beneficial for both investors and exchanges as well as for economic growth of region overall. It will be interesting to see how these changes affect cryptocurrency prices going forward so stay tuned!