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For quite a while, Hong Kong has been bombarded by several hurdles in the financial sector. However, it stands as one of the most favorable financial hotspots around the Asian-Pacific region. Nevertheless, the use of virtual currencies in the city is the only financial sector that seems to be lagging.
Late last year, Hong Kong financial regulators implemented a law that required all cryptocurrency market handlers to register with the government. At the time, the crypto regulation was not precise, and investors weren’t intrigued in trading with such an unfamiliar situation. The regulations helped Hong Kong engage in the crypto market, but more can be done to clarify the large recommendations.
Hong Kong’s Cryptocurrency Vision
The metropolitan area’s call for cryptocurrency trading platform regulation was certainly a step towards promoting virtual currencies in its financial area. Nonetheless, the city’s Securities and Future Commission (SFC) stated that exchanges would only be available to investors with a minimum of 8 million HK$ in assets. The SFC terms the investors as ‘Professional Investors’
The SFC was previously offering licenses to exchanges as an optional requirement, but the rule change in November 2020 saw the offer change to mandatory. The first virtual currency exchange platform to receive a license in the region was OSL Digital Securities.
Singapore, a country famous for its crypto-financial activities, has made several moves to help financial institutions avail cryptocurrency activities to investors. Several blockchain startups and cryptocurrency platforms flog the country.
Unfortunately, the funding behind these companies could almost be considered amiss. Hong Kong could thrive better if it decides to create a favorable market for crypto enthusiasts if, case and point.
According to democracy analyst Eleanor Albert, the city offers low taxes, a highly developed financial system, and feather-light regulations. He said that those parameters separate Hong Kong from other Chinese financial strongholds such as Shanghai and Shenzhen.
However, it might be risky for Hong Kong to act in haste when it comes to crypto adoption in the region. Financial regulators should consider making the market accessible for both retail and professional investors.
Asia’s Crypto Financial Trend
According to research done by Chainalysis, East Asia accounted for 31% of last year’s cryptocurrency transactions. The region’s addresses received a whopping $107 Billion worth of cryptocurrency. The region was not closely followed by Western Europe, which tallied 77% behind East Asia’s cryptocurrency transactions.
India’s cryptocurrency market has faced many uncertainties following the country’s fear of cryptocurrency trading. Nonetheless, India’s Supreme Court recently overturned a rule that banned banks from issuing cryptocurrency. The RBI is now seeking to pass a bill that will digitize their fiat currencies and provide the blueprint for using them.
The Asian region has been very active on the cryptocurrency regime, although some Asian countries are afraid of virtual currencies’ risks.