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CoinDesk recently unveiled its comprehensive roster of global crypto hubs, but conspicuously absent from the list were two prominent contenders: Tokyo and Hong Kong. While other jurisdictions, notably the United States, have been less receptive towards cryptocurrencies, these two Asian powerhouses have boldly embraced the digital revolution. So why were they overlooked? One possible explanation is that, despite their prior experience in the crypto realm, both Tokyo and Hong Kong momentarily took a step back from the spotlight. However, it's becoming increasingly evident that Japan and Hong Kong are poised to emerge as pivotal players in the ever-expanding world of cryptocurrencies.
Let's begin with Japan, a country that is actively striving to establish itself as a dominant force in the Web3 industry. It's important to note that Japan is far from being a newcomer in this field. However, following the hacking incident of the cryptocurrency exchange Coincheck in early 2018, the country underwent a phase akin to hibernation. Regulatory measures were intensified, and the overall sentiment within the crypto community was rather pessimistic.
Currently, Japan has undoubtedly regained its position. Authorities have drawn valuable insights from the Coincheck hack and the preceding Mt. Gox incident, implementing protective measures to safeguard users. Consequently, while the crypto industry faced turmoil following the collapse of FTX, FTX Japan users enjoyed comparatively greater protection. Moreover, certain politicians in Tokyo are actively striving to establish well-defined regulations for cryptocurrencies, demonstrating their proactive approach.
Hong Kong, despite its long-standing presence in the Web3 realm, may have faced challenges in recent years due to COVID-19 lockdowns and news of mainland China's strict measures on the crypto industry. However, the city is now actively striving to establish itself as a prominent global destination for cryptocurrencies. In June, Hong Kong initiated the process of granting licenses to crypto exchanges and has reportedly exerted pressure on banks to engage with crypto exchanges as their clients.
While the United States perceives risks, Hong Kong perceives opportunities. Despite Coinbase's ongoing struggles with the SEC, a Hong Kong legislator extended an invitation to the largest American cryptocurrency exchange to seek permission for operating within the region. This welcoming approach from Hong Kong is noteworthy considering the past instances of cryptocurrency crackdowns in mainland China, which seemingly hints at their implicit support for Hong Kong's accommodating stance. However, it remains to be seen how long this favorable situation will persist.
Operating crypto exchanges in Hong Kong or Tokyo is not without challenges. These jurisdictions impose strict regulations and limitations, making it difficult for some international companies to thrive. For instance, both Kraken and Coinbase have recently withdrawn from Japan, highlighting the hardships faced in these markets.
However, it is evident that both Hong Kong and Tokyo have expressed their openness towards crypto-related ventures, which positions them as appealing destinations for global crypto businesses.
Source Coindesk
