A recent report from Chainalysis reveals that Hong Kong has experienced an impressive 85.6% increase in cryptocurrency adoption, placing it 30th globally in this area. This growth highlights Hong Kong’s rising significance in the world of digital currencies.
Eastern Asia remains an important player in the world’s crypto economy, which is ranked sixth largest. Between July 2023 and June 2024, the region contributed 8.9% of the total global value received and recorded over $400 billion in on-chain transactions.
On the other hand, China has been pursuing a crackdown on cryptocurrency since 2021. However, this clampdown has not stopped citizens from getting involved in cryptocurrency in other ways. It revealed a clear trend towards over-the-counter (OTC) and peer-to-peer (P2P) trading platforms since mid-2023. Ben Charoenwong, an associate professor of finance at INSEAD’s Asia Campus, stated that it was traditionally possible to take money out of China, though this comes with a cost of up to 25 to 30%. This has led to the adoption of faster and cheaper solutions by many individuals in the crypto space.
Stablecoins Represent Over 40% of Total Crypto Value in Hong Kong
Although the central government in mainland China has restricted the use of cryptocurrencies, Hong Kong is turning into a major crypto hub in the Greater China territory. It has also regulated cryptocurrencies and supported financial innovation by endorsing them. For instance, stablecoins account for more than 40% of the total crypto value received in Hong Kong every quarter.
In June 2023, Hong Kong’s securities regulator issued new rules for trading platforms related to cryptocurrencies. These rules are designed to provide a safe investing environment by including strict AML measures. This regulatory approach is popular with institutional investors and has cemented Hong Kong’s place in the global cryptocurrency market.
Lastly, the data analysis describes the extremely rapid development of the adoption of cryptocurrencies in Hong Kong as part of a general trend in Eastern Asia, indicative of the region’s significance for the development of the digital financial industry.
