Tokyo and Hong Kong are important locations for cryptocurrency.
Blockchain has released its list of global crypto hubs, but there are two notable absences. Tokyo and Hong Kong have been very vocal in their support of crypto, while other countries, such as the United States, have been less friendly towards the industry. So why aren’t they on the list? One possible reason is that even though they are not new to crypto, they have stayed out of the spotlight for some time. However, Japan and Hong Kong are now ready to become significant players in the crypto world.
Emily Parker is the Executive Director of Global Content at Blockchain.
Let’s start with Japan, which is actively positioning itself as a Web3 powerhouse. Japan is not new to the industry, but after the Coincheck cryptocurrency exchange was hacked in early 2018, the country became cautious. Regulators tightened their controls, and the mood in the crypto community was not optimistic.
However, Japan has bounced back. Regulators learned from the Coincheck and Mt. Gox hacks and implemented safeguards to protect users. When FTX collapsed, FTX Japan users were relatively safe. Some politicians in Tokyo are working to establish clear crypto regulations.
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Hong Kong is another hub that has been in the Web3 industry for some time, but its appeal may have been affected by COVID-19 lockdowns and China’s crackdown on crypto. However, Hong Kong is now making a clear effort to become a global crypto destination. The region began accepting licenses for crypto exchanges in June and has pressured banks to work with crypto exchanges.
While the United States sees risks, Hong Kong sees opportunities. Despite Coinbase’s struggles with the SEC, a Hong Kong lawmaker has invited the largest US crypto exchange to apply to operate in the region. Hong Kong’s welcoming stance toward crypto is noteworthy in light of China’s history of crypto crackdowns, which appears to tacitly support Hong Kong’s position, at least for now.
However, operating a crypto exchange in Tokyo or Hong Kong is not easy. These jurisdictions have significant rules and restrictions, and some global companies may find it challenging to survive there. For example, both Kraken and Coinbase recently left Japan.
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Nevertheless, Japan and Hong Kong have made it clear that they are open for crypto business and are likely to attract crypto businesses from around the world.