Kaiko, the cryptocurrency market data provider based in Paris, is set to relocate its Asian headquarters from Singapore to Hong Kong, driven by the latter’s efforts to cement itself as a global leader in the digital asset space.
The city’s pro-crypto policy pivot and emergence from Covid-related restrictions were also key factors that influenced the move Kaiko’s CEO, Ambre Soubiran, said in a Bloomberg interview on March 16. She believes Hong Kong’s recent regulatory changes and initiatives are clear indicators of the direction capital will flow, making it an attractive destination for hedge funds, investors, and asset managers.
As Hong Kong strives to develop crypto rules that encourage growth while safeguarding investor interests, the city is also learning from past bankruptcies like the FTX exchange, positioning itself for a rebound from a $2 trillion market rout.
While the US has been cracking down on crypto, and Singapore is considering stricter rules following the FTX fallout, Hong Kong is set to allow retail investors to trade larger tokens such as bitcoin (BTC) and ether (ETH) later this year, with a mandatory licensing regime for stablecoins due by 2023-2024.
According to Soubiran, Hong Kong’s regulatory landscape is changing positively, and Kaiko wants to support the institutionalization, growth, and establishment of the digital asset class in the city.
Challenges facing the crypto industry
The crypto industry remains in a deep downturn after a bubble in token prices last year, causing investors to flee. As a result, several companies, including Coinbase Global, Crypto.com, and Huobi, slashed thousands of jobs. Others are waiting for a crypto recovery and Hong Kong’s revamped digital-asset rules before committing scarce investment funds.
Despite this, Kaiko’s Head of Asia-Pacific, Sean Lawrence, is set to relocate from Singapore to Hong Kong by the end of March. Lawrence suggested that figuratively, “something like nine out of 10 people” in crypto is discussing returning to Hong Kong somehow.
A new licensing regime for crypto exchanges is expected to be implemented on June 1. Hong Kong’s pivot towards fostering the digital asset sector is part of a broader effort to restore its credentials as a cutting-edge financial center after experiencing a brain drain due to Covid-related curbs and political unrest.