According to financefeeds.com, the government of Hong Kong is trying to attract digital asset businesses in a bid to increase the access of retail investors to cryptocurrencies and crypto exchange-traded funds. In this context, companies such as Gate.io are seeking to capitalise on the city’s efforts to establish itself as a digital asset hub by becoming compliant with local crypto regulations.
Gate.io representatives cited by the same source revealed that the Gate Group has already secured a TCSP licence in Hong Kong and that it is now gearing up to obtain a crypto licence and to launch Gate HK, a new platform designed to serve HK’s growing crypto market.
In February 2023, the Hong Kong Monetary Authority has revealed its intentions to introduce new regulations on crypto assets and stablecoins. The HKMA is currently analysing the pros and cons of introducing new regulations or amending existing laws concerning stablecoins. The HKMA has also issued a discussion paper on crypto-assets and stablecoins on 12 January 2022 and encouraged feedback from stakeholders.
Gate.io’s pledge to support crypto
In December 2022, Gate.io has pledged USD 100 million as part of a liquidity support fund that aims to support the crypto industry. With this fund, Gate.io is trying to minimise the negative impacts of a bear market and ecosystem collapses, both of which have prompted investors to move their funds away from exchanges into self-custody.
Furthermore, in order to address market liquidity concerns, the fund will support companies that are looking to adapt to changing market conditions. The USD 100 million will be allocated to high-quality projects, high-frequency traders, market makers, and other institutional clients and HNW individuals.
Other companies that have applied for licences in Hong Kong
In February 2023, China-based cryptocurrency exchanges Huobi Global and OKX have also revealed their plans to apply for licences in Hong Kong considering upcoming regulations. As part of a new regulatory package that will be implemented in June 2023, these two exchanges will be able operate in Hong Kong after they become registered with the Hong Kong Securities and Futures Commission (SFC).
The new rules are in line with the city’s vision of becoming a virtual asset hub. According to en.pingwest.com, Huobi representatives also revealed their intention to open a new Huobi Hong Kong exchange that will work mostly with institutions and high-net-worth individuals.
