Hong Kong sees biggest uptick in cryptocurrency activity in East Asia
The city rose to 30th place, up from the No 47 spot last year, in this year’s Global Cryptocurrency Adoption Index rankings by Chainalysis.
Hong Kong has seen the biggest uptick in cryptocurrency activity in East Asia amid the city’s efforts to become a virtual-asset hub, according to new research, while mainland Chinese use digital currencies to preserve wealth in spite of the government’s draconian ban.
Hong Kong saw an 85.6 per cent year-on-year surge in cryptocurrency transaction value, the largest growth seen in East Asia.
Hong Kong regulators’ acceptance of cryptocurrencies and “decisiveness” in laying down a regulatory framework helped build up institutional adoption, according to Chainalysis. Its index measures activities across several types of cryptocurrency services, including centralised exchanges and decentralised protocols. It also showed that Hong Kong and mainland China ranked as the second- and fifth-largest crypto markets, respectively, in the region.
The latest rankings reflect how Hong Kong has managed to make the city’s virtual-asset market attractive via “regulatory clarity”, which has helped guard against risks to retail investors.
Fоllowing the Hong Kong government’s announcement of policy support for virtual assets in 2022, the first licence requirement for cryptocurrency exchanges took effect in June 2023. Since then, the city has launched exchange-traded funds that invest directly into cryptocurrency tokens. It is also working on regulation for stablecoins, which are typically pegged to fiat currencies such as the US dollar.