Hong Kong Woos Crypto Firms to Reclaim Finance Hub Status

Hong Kong is trying to rediscover its lost status as a financial hub by rolling out the red carpet to mainland-China crypto firms. After bankers and financial services experts left Hong Kong in droves in fear of tight COVID-19 curbs, leaders of the island city want to get them back.

Hong Kong wants to position itself as an “international virtual asset center.” Senior government officials have been openly in support of the plan. Hong Kong plans to host over 100 crypto-related conferences and glamorous parties in April alone.

Emerging crypto exchange Hashkey saw 13,000 people attend the first day of its Hong Kong Web3 Festival in April. HashKey received a license to operate in Hong Kong in November, making it one of two licensed crypto exchanges in the city besides rival exchange OSL.

Analysts point out that crypto investor sentiment has always been that Hong Kong shares the same anti-crypto feelings as mainland China. However, the Hong Kong government is now keen on showing that the city practices different laws than China.

Encouraged by Hong Kong’s attitude change, more than 10 companies with Chinese affiliations, including OKX, Bybit and Huobi, have announced plans to apply for licenses in Hong Kong. Some firms that have expressed interest in setting up in Hong Kong have exited such countries as Canada and the UK due to fierce regulatory pressure.

Still, some market watchers have reservations about Hong Kong as a stable crypto center, suggesting that Hong Kong could perform an about-turn if China puts enough pressure on it.