Dubai-based Bybit has announced plans to build its central Asian business in Hong Kong. The exchange intends to have a segment of its marketing, research, and development team in the city.
WSJ has recently reported that Bybit has plans to establish its primary Asian operations in Hong Kong. The crypto exchange intends to seek a license in the city under the proposed legislation, effective in June.
Bybit CEO, Ben Zhou, said that liquidity is king in the exchange sector, and Hong Kong had an abundance of it due to capital inflows from institutional investors. He also praised the city’s developed capital markets, high levels of financial literacy, and the quantity of genuine and knowledgeable investors.
According to the Wall Street Journal, several businesses have expressed concerns over the costs of obtaining and maintaining licenses and the possible profitability of establishing operations in Hong Kong.
The rules proposed in the city for centralized exchanges and retail trading are too conservative, limiting trade to highly liquid and established cryptocurrencies like bitcoin and ether.
Whether exchanges will be allowed to cater only to residents, who constitute a relatively small market, while the securities regulator finalizes the guidelines is yet to be seen.
US crypto crackdown creates opportunities for Hong Kong
The Wall Street Journal also reported that Hong Kong aims to entice crypto companies to the city, aided by stepped-up enforcement by American officials.
Due to stiff competition from Singapore, worries about China’s firm stance on cryptocurrencies, and Hong Kong’s delayed and stringent response to Covid-19, many well-known cryptocurrency companies, including Crypto.com, BitMEX, and the now-bankrupt FTX, have fled the city.