What market offers the most favorable environment for virtual assets? This distinction is still very disputed, and several financial centers compete to become main digital assets, with the aim of attracting innovation, investment and jobs. In Asia, two of the most prominent players in this space are Hong Kong and Singapore.
The regulatory environment of Hong Kong will be Linchpin for its success. The correct regime will not only provide guidelines to interested parties, but will attract them first. And although entrepreneurs and corporations are often the focus of such policies, regulators must pay so much attention to retail and institutional investors. After all, investors provide the financial support that companies need to succeed in what is typically an intensive capital market.
Why do investors need a safe and regulated encryption market
Investors around the world have suffered the worst part of the negative effects of the days of the wild west of Crypto. We see this pattern at play from Mount Gox to FTX and other intermediate exchanges: when they go to the belly due to a trick or other problems, investors have few resources or hope of recovering their funds.
The same is true for individual currencies: the failure of some chips, such as Terrausd and Luna, has led to the financial ruin of many investors. And there are other scammers worldwide for cryptography, from pig carnage operators that pass false mining operations, to phishing scams aimed at regulated cryptography exchanges, to schemes that even intend to specialize in recovery of these funds.
Hong Kong’s competitive advantage in the regulation of digital assets
Although the digital asset sector has been relentless for investors, it is the role of regulators in Hong Kong to ensure that cryptography becomes friendly with investors.
The regulators here already have a great beginning. The main responsible agency is the Commission of Securities and Futures, which regulates and license which considers virtual asset trade platforms (VATP). These companies are subject to strict policies that protect investors, including everything from KYC and AML to dissemination of custody and risk.
While many markets have promulgated Marcos for cryptocurrency, Hong Kong has a great advantage: speed. For example, Hong Kong was one of the first markets in the Asia Pacífic The underlying cryptographic assets. instead of cash. Beyond that, the territory constantly scan the horizon for other possible policies to refine its regulatory guidelines.
Hong Kong also has a robust Sandbox program for stablcoins and discretionary accounts on which he is improving regularly. To this end, the SFC has approved several licensed fund managers to provide discretionary management services for virtual assets. This feature allows fund managers to execute the unique investment mandate of each investor in pre -approved exchanges from end to extreme, including the purchase and sale of virtual assets, as well as to provide other services, such as derivatives, reports and monitoring of portfolio and renewal. .
How Hong Kong can strengthen its cryptographic framework
To innovate even more in his robust fundamental regulatory framework, Hong Kong can focus on these three pillars.
1. Market education. It is not enough for regulators to provide investors access to digital assets: they must also provide educational resources to maximize their investments. Digital assets, after all, come with unique risks. The most obvious is volatility, but there are others, such as security, liquidity and sustainability.
Hong Kong regulators must provide education about digital assets and their risks, and continue to require their VATP to do the same. After an evaluation of each prospective investor, the VATPs must provide not only disseminations and warnings, but also educational materials to improve the understanding of the investors of digital assets. Informed and polite investors will benefit individual and Hong Kong Vatp as a whole, which will result in less failures and similar problems to deal with.
2. Assets and friendly features with investors. While digital assets are often discussed in monolithic terms, currencies are very different when examined from the point of view of the investor. At one end, there are digital assets that are not friendly to investors. The examples include memecoras that have extreme volatility, such as Shiba Inu or Pepe Coin, or privacy currencies such as Monero.
At the other extreme, there are digital assets that are very friendly to investors. The most notable recent example is the funds quoted in the stock market (ETF) Spot Bitcoin, which provide investors exposed to $ BTC without having to go through the discomfort of buying it directly, noting its private keys and ensuring it in a cold or hot wallet. In addition to encouraging VATP to focus on similar assets for investors, Hong Kong should also authorize the development of platform characteristics that simplify and rationalize the investor’s experience. Its North Star is clear: what assets or characteristics will make it easier for investors to support projects and companies in cryptography?
3. Transparent regulatory environment. Regulatory clarity is not always a priority of agencies. We saw this principle at stake in the United States, where the stock and values commission (SEC) began processing cryptographic exchanges and other institutions to offer what it considered unregistered values. The law cited for these violations was not a cryptographic framework, but the Howey test, which originated in a case of the 1946 Supreme Court that involved the SEC. This application, naturally, discouraged other cryptographic investors, companies and interested parties to establish a store in the United States because they were afraid to be punished due to the lack of regulatory clarity. While President Trump is establishing a pro-Crypto administration, the damage can already be done: companies in space can prioritize other markets.
Hong Kong should continue his culture of transparency and collaboration, as evident in the recent proposal of a draft Stablecoins by the monetary authority of Hong Kong (HKMA). While the bill only reached the headlines recently, the HKMA had been consulting with the interested parties about its structure for more than a year. This transparency, organizations know what laws can come, how they will apply and even count on their execution, will allow investors and companies to align their own plans with what will be allowed in the regulatory environment.
Prepared to lead the future cryptographic of Asia
Cryptographic regulations are running ahead in 2025, but Hong Kong can distinguish their own cryptographic regime by emphasizing market education for all investors, favorable assets and exchange characteristics, and a transparent regulatory environment that enables interested parties to plan their actions in advance of policy policies. changes. If Hong Kong can continue with this three -pointed approach, he will seize the mantle as the main cryptographic center of Asia, not only because he is friendly with investors, but because he is first investor.
