CoinDesk, a leading cryptocurrency news platform, recently released its list of global crypto hubs, but there were two notable omissions: Tokyo and Hong Kong. This is surprising considering that both cities have been openly embracing cryptocurrencies while other jurisdictions, notably the United States, have adopted a less friendly stance. The exclusion of Tokyo and Hong Kong from the list might be attributed to their temporary retreat from the spotlight in the past, but now they are poised to become key players in the crypto world.
Let’s first focus on Japan, which is actively positioning itself as a powerhouse in the Web3 space. While Japan is not new to cryptocurrencies, after the infamous Coincheck hack in early 2018, the country scaled back its crypto activities. Regulators tightened regulations, and the overall sentiment within the crypto community was less optimistic. However, Japan has made a comeback and learned from its past experiences. Safeguards have been implemented to protect users, resulting in better protection for FTX Japan users during the collapse of FTX. Tokyo politicians are also actively working towards establishing clear rules for the crypto industry.
Moving on to Hong Kong, another prominent hub in the crypto world, we find that its appeal has been somewhat dampened in recent years due to COVID-19 restrictions and concerns over China’s crackdown on cryptocurrencies. Yet, Hong Kong is now making a concerted effort to position itself as a global crypto destination. In June, the city started accepting licenses for crypto exchanges and has reportedly pressured banks to provide services to these exchanges. Unlike the United States, which views cryptocurrency as a risk, Hong Kong sees it as an opportunity. In fact, a Hong Kong lawmaker even invited Coinbase, the largest US crypto exchange, to apply for operations in the region. Hong Kong’s welcoming stance is noteworthy considering China’s history of cracking down on cryptocurrencies, which is seen as at least tacit support for Hong Kong’s crypto-friendly approach.
However, it should be noted that operating crypto exchanges in Tokyo or Hong Kong comes with significant regulatory requirements and restrictions. Global companies might find it challenging to navigate these regions. For instance, both Kraken and Coinbase recently exited the Japanese market due to these complexities. Yet, despite these challenges, Japan and Hong Kong have made it abundantly clear that they are open for crypto business. This openness is likely to attract crypto companies and entrepreneurs from around the world.
In conclusion, CoinDesk’s omission of Tokyo and Hong Kong from its list of global crypto hubs may reflect their previous retreat from the spotlight. However, both cities have reemerged as key players in the crypto world, actively seeking to position themselves as crypto-friendly jurisdictions. While operating in Tokyo or Hong Kong presents challenges, their commitment to crypto business is likely to draw global players interested in taking advantage of the opportunities presented by these crypto hotspots.