As CoinDesk releases its compilation of global crypto hubs, there are two notable absences: Tokyo and Hong Kong. Despite the United States sending a less welcoming message to the crypto industry, Tokyo and Hong Kong have been openly embracing cryptocurrencies. However, these two cities did not make it onto the list. One possible explanation for this omission is that although Tokyo and Hong Kong have been involved in the crypto scene for some time, they took a step back from the limelight for a period. Nevertheless, both cities are now positioning themselves to become significant players in the crypto world.
Let’s begin with Japan, which has been actively striving to establish itself as a powerhouse in the Web3 space. It’s important to note that Japan is by no means a newcomer to the crypto industry. However, after the infamous Coincheck hack in early 2018, the country went into a state of caution. Regulatory measures were tightened, and the overall sentiment within the crypto community was not particularly optimistic.
Now, Japan is unmistakably back on track. Regulators have learned valuable lessons from previous hacks, including the Coincheck incident and the infamous Mt. Gox collapse, and have implemented stringent measures to safeguard users. Consequently, while much of the crypto world was reeling from the FTX collapse, FTX Japan users were comparatively protected. Some politicians in Tokyo are actively working to establish clear regulatory frameworks for the crypto industry.
Hong Kong, another well-established crypto hub, may have experienced a decline in its appeal due to COVID-19 restrictions and concerns regarding mainland China’s crackdown on cryptocurrencies in recent years. However, the city is making a concerted effort to position itself as a global crypto destination. In June, Hong Kong began accepting licenses for crypto exchanges and reportedly pressured banks to collaborate with these exchanges.
While the United States views crypto as risky, Hong Kong sees it as an opportunity. Amid Coinbase’s ongoing battles with the SEC, a Hong Kong lawmaker invited the largest U.S. crypto exchange to apply for operations in the region. Hong Kong’s stance is particularly notable considering the backdrop of crypto crackdowns in mainland China, which appears to at least tacitly endorse Hong Kong’s welcoming approach, at least for now.
Nevertheless, it won’t be a walk in the park for crypto exchanges in Tokyo and Hong Kong. These jurisdictions come with significant regulations and restrictions, making it challenging for global companies to thrive there. For instance, both Kraken and Coinbase recently exited the Japanese market.
Nonetheless, Tokyo and Hong Kong have made it abundantly clear that they are open for crypto business, which is likely to attract crypto companies from around the world.