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Hong Kong ‘prepared’ to capitalize on crypto’s subsequent bull run: Hashkey Capital

10 Nov 2023
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Hong Kong is “very prepared” for the following wave of mass crypto adoption, with an inflow of crypto expertise that has been spilling into the aspiring digital asset hub, says Jupiter Zheng, a companion at Hashkey Capital.

Talking to Cointelegraph, Zheng, companion of liquid funds and analysis on the funding arm of Hong Kong crypto agency HashKey Group — defined that the mix of new Web3 projects together with crypto-positive regulatory developments has primed Hong Kong for vital development within the subsequent 4 to 5 years.

“You’ve received all of those new, completely different initiatives, with their founders and groups right here, which is all actual GDP by the way in which. These groups are already boosting each banking and capital market actions.”

Zheng added that whereas crypto costs haven’t mirrored it, the extent of sophistication being developed within the sector over the previous 18 months had been putting.

“The precise technological enchancment we’ve seen all through the bear market has been fairly astonishing. So I feel from the expertise facet, we’re very prepared for the following wave of bigger mass adoption within the crypto world,” mentioned Zheng.

The explanation for his bullishness for the area was primarily based on h perception that the Hong Kong authorities is in dire want of a brand new financial driver, one thing that Zheng believes the crypto sector is able to supply.

“The GDP in Hong Kong lately hasn’t been wanting so good — largely as a result of Covid. So it wants a brand new driver,” Zheng mentioned. “So it’s my idea that crypto and Web3 are the brand new drivers right here.”

On Aug. 3 this 12 months, Hashkey became the first crypto exchange in Hong Kong to obtain a selected license that allowed them to supply crypto property to retail traders.

Zheng admitted that whereas he’s indirectly concerned within the change arm of Hashkey, he expects the demand for crypto merchandise from native Hong Kong residents to develop as the federal government continues to shore up investor considerations by outlining its regulatory scheme for the sector.

“The current coverage modifications give retail traders security as a result of now you’ve received insurance coverage authorized protections,” he mentioned.

“You do not have to make use of on-line wallets to do self-custody. All you want to do is open an account on an change, after which you should use your Hong Kong {dollars} to purchase Bitcoins and different crypto. It is fairly straightforward.”

“For now it is nonetheless a bear market, however when the bull market comes again, we are able to assume that individuals’s outlook will change rapidly. Retail will certainly be coming again, particularly once they have numerous alternatives to purchase securely with licensed exchanges.”

General, Zheng predicts that Web3 in Asia and Hong Kong will witness an identical sample of improvement to that of the GameFi sector in South East Asia in 2021, which noticed Axie Infinity briefly become one of the most-played games on the earth.

In Zheng’s view, whereas Axie was susceptible to large hypothesis, the underlying mannequin of improvement can be comparable — initiatives which can be developed within the U.S. and Europe may simply discover a welcoming market in Asia.

“I feel sooner or later Asia will nonetheless comply with the identical sample. Protocols and infrastructure initiatives which can be developed in the US or Europe or Australia might not witness large adoption the place they’re developed — but when they need to discover a market they’ll go to Asia.”

Associated: Swiss crypto bank SEBA gets Hong Kong SFC license

Zheng conceded that whereas development can be much less feverish than as soon as seen in South East Asia, there’ll be extra of a sober and well-regulated give attention to protocols and blockchain infrastructure instead of rampant speculation on gaming.

It’s value noting that Hong Kong was rocked by a crypto exchange scandal in September, by which an unlicensed change known as JPEX allegedly swindled traders out of some $165 million. The fallout has since been described because the one of the worst financial crises to have ever hit the area.

Regardless of the debacle, Hong Kong’s secretary for monetary companies and the treasury Christian Hui assured a crowd of traders, authorities officers and different regulators at HK Fintech week that the JPEX drama hadn’t affected the federal government’s aspirations to show Hong Kong into Asia’s crypto hub.

Hong Kong additionally pledged to tighten its crypto rules after JPEX’s alleged actions. The SFC additionally arrange a task force with the police to cope with illicit crypto change actions and updated its policies on crypto gross sales and necessities.

Asia Specific: Chinese police vs. Web3, blockchain centralization continues