• Hong Kong’s Securities and Futures Commission (SFC) has taken a new approach to the crypto industry that could benefit the market by bringing in new capital.
• Data suggests that Asian exchanges have benefited the most from the 2021 bull run, but since China outlawed digital assets at the end of 2021, Asia has lagged behind other regions.
• The SFC will allow trading in “largest cap virtual assets” included in at least two approved indices, with perpetual futures markets reacting positively to the possibility of renewed flows from Asia.

Hong Kong Takes New Approach To Crypto Market

Hong Kong’s Securities and Futures Commission (SFC) has taken a new approach to regulating the crypto industry which could benefit the market by bringing in new capital. On Monday, Hong Kong made clear its intentions to open up crypto trading in the Asian region, marking a stark contrast to enforcement actions taken by US regulators such as the SEC.

Asian Exchanges Benefit From Bull Run

Data compiled by Kaiko shows that Asian exchanges have benefited greatly from this year’s bull run. However, since China outlawed digital assets at the end of 2021, Asia has significantly lagged behind other regions when looking at Binance’s trading volumes.

SFC Proposal

The SFC proposal states that they will allow trading in “largest cap virtual assets” included in at least two approved indices. This news was met with positive reactions from perpetual futures markets due to potential for renewed flows from Asia into these eligible tokens.

Why The Policy Shift?

Kaiko analyst Conor Ryder suggests that given SEC’s “carpet bomb”, now would be a perfect time for Hong Kong to take advantage of this opportunity and become an attractive destination for capital inflow into digital assets. This could mean economic growth for not just Hong Kong but other jurisdictions as well who are loosening their regulatory policies towards cryptocurrencies.

Conclusion

The influx of new capital into Asia could bring significant benefits to both investors and businesses operating within cryptocurrency markets, allowing them access to more liquidity and lower fees than ever before. It remains to be seen whether or not this policy shift will spark a rally similar to what happened earlier this year, however it is certainly a step forward for digital asset adoption on an international level