As CoinDesk releases its comprehensive list of global crypto hubs, it is noticeable that Tokyo and Hong Kong are absent from the rankings. This is particularly striking since both cities have been openly welcoming cryptocurrencies, especially in contrast to jurisdictions such as the United States, which has been sending less crypto-friendly signals. So why are Tokyo and Hong Kong not on the list? One possible explanation is that although they have been involved in the crypto space for some time, they have stayed away from the limelight for a period. However, it seems that both Japan and Hong Kong are now ready to assume prominent roles in the crypto world.
Let’s first focus on Japan, which is actively positioning itself as a powerhouse in the Web3 era. It is important to note that Japan is not new to the cryptocurrency scene. However, after the notorious Coincheck hack in early 2018, the country seemed to retreat from the industry. Regulators implemented stricter regulations, and the overall sentiment in the crypto community was not very optimistic.
Nevertheless, Japan has made a notable comeback. The regulators have learned from the experiences of high-profile hacks like Coincheck and Mt. Gox, and have implemented measures to safeguard users. Consequently, when FTX, a major player in the crypto world, collapsed, FTX Japan users were relatively shielded from the fallout. Some politicians in Tokyo are actively working towards establishing clear regulations for the crypto space, signaling the government’s commitment to nurturing the industry.
Moving on to Hong Kong, another well-established crypto hub, it appears that its growth may have been inhibited in recent years due to COVID-19 restrictions and concerns about China’s crackdown on cryptocurrencies. However, the city is now making a concerted effort to position itself as a leading global crypto destination. In June, Hong Kong began accepting licenses for crypto exchanges, and there have been reports of pressure on banks to engage with crypto exchanges as clients.
Where the United States perceives risks associated with cryptocurrencies, Hong Kong sees opportunities. Amid Coinbase’s regulatory battles with the US Securities and Exchange Commission (SEC), a Hong Kong lawmaker extended an invitation for the largest US crypto exchange to apply for operations in the region. This stance by Hong Kong is noteworthy considering mainland China’s history of cracking down on cryptocurrencies, suggesting a tacit endorsement for Hong Kong’s welcoming approach. It is important to note, however, that operating crypto exchanges in Hong Kong and Tokyo is not without complexities. These jurisdictions have significant rules and restrictions, making it challenging for some international firms to thrive. Notably, both Kraken and Coinbase have recently withdrawn from Japan.
Nevertheless, Tokyo and Hong Kong have demonstrated their openness to crypto businesses, making them attractive destinations for companies in the crypto space from around the world. The absence of these cities from CoinDesk’s list is intriguing, given their commitment to fostering a thriving crypto ecosystem. For those looking to understand the most promising crypto hotspots, it is crucial to consider these two influential cities.