Bybit, a cryptocurrency exchange with headquarters in Dubai, recently revealed plans to expand to Hong Kong.
A portion of the exchange’s marketing, research, and development team will be based in the city. According to a recent WSJ report, Bybit intends to base its main Asian operations in Hong Kong. Under the new legislation, which will take effect in June, the cryptocurrency exchange plans to apply for a license in the city.
According to Ben Zhou, CEO of Bybit, liquidity is king in the exchange industry, and thanks to institutional investors’ capital inflows, Hong Kong has a surplus of it.
The city’s well-developed capital markets, high levels of financial literacy, and the sheer number of sincere and knowledgeable investors were also praised by the speaker.
The Wall Street Journal reports that a number of companies have voiced worries about the expense of obtaining and maintaining licenses as well as the potential profitability of setting up operations in Hong Kong.
The city’s proposed regulations for centralized exchanges and retail trading are overly restrictive and only allow for the trading of well-known, highly liquid cryptocurrencies like bitcoin and ether.
While the securities regulator completes the rules, it is unclear if exchanges will be permitted to serve only residents, who make up a relatively small market.
US Cryptocurrency Crackdown Opens Doors For Hong Kong
The Wall Street Journal also reported that, with the help of increased enforcement by American officials, Hong Kong hopes to lure cryptocurrency companies to the city.
Owing to heavy competition from Singapore, worries about China’s tough attitude on cryptocurrencies, and Hong Kong’s delayed and stringent response to Covid-19, many well-known cryptocurrency companies, including Crypto.com, BitMEX, and the now-bankrupt FTX, have fled the city.
