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How has Hong Kong and Singapore Changed Through Crypto?

How has Hong Kong and Singapore Changed Through Crypto?

about 1 year ago by Cameron Fox
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Both Hong Kong and Singapore have embraced the virtual asset community, which has resulted in considerable opportunity for both cities. Singapore adopted the blockchain back in 2016 and Hong Kong has recently enabled retail investors to trade in crypto-currencies and crypto exchange-traded funds.

 

With both cities adopting an open and inclusive policy around crypto, they have become an attractive place for investors. Opening towards the virtual asset community, sends a loud message regarding Hong Kong’s determination to maintain its stance as a leading financial centre. As Adrian Cheng puts it, Hong Kong is ‘back into the game’ when it comes to Crypto and has laid a solid regulatory foundation towards propelling the birth of a world leading digital issuance hub of global securities. According to the crypto readiness report, Hong Kong is now considered the most crypto-ready country in 2022, through considering geographic size, blockchain start-ups and the number of crypto ATMs proportional to the population. Through Hong Kong’s being situated along the South China Sea, it has become an ideal destination for companies to establish themselves and become an outlet for Chinese crypto trading. This is furthered through Hong Kong and Singapore’s geographical convenience, being a springboard to South-east-Asia, India and Western markets, as well as the AAA-rated supply chain of professional services businesses. Due to the flow of digital asset investment, the CEO of Aspen Digital Yang He, stated there has been a huge increase in institutional investor interest in Singapore over the last 18 month. This is only set to increase with a recent study conducted by Cerulli finding 55 percent of family offices in Hong Kong and Singapore are wanting to increase their crypto exposure over the next two years.

 

The impact of crypto has also changed Hong Kong and Singapore through increased public awareness. Indeed, a new report from KPMG found over 90% of the 30 or so family offices and high-net-worth individuals (HNWI) in Hong Kong and Singapore are ‘interested in investing in the digital assets (58%) space or have already done so’ (34%), managing assets between $10million to $500million. According to KPMG the large uptake among the ultra-wealthy has ‘increased confidence in the sector’ which has been ‘spurred by the mainstream institutional attention’. Singapore’s latest bank DBS have recently announced they are expanding crypto services on their digital exchange to approximately 100,00 wealthy clients who meet the income criteria to be classed accredited investors, which will further expand the influence of the block chain across Singapore. With Singapore, boasting the second highest percentage of millionaire adults (7.5%) there is considerable opportunity for sustained crypto investment. Due to the unrivalled opportunities compared to other financial products, this has led to what He calls an ‘emerging asset class’.

 

Through both cities becoming an attractive place for investors and increased public awareness they are both on route towards further solidifying their influence as global financial hubs. According to the 2022 global financial centres index, Hong Kong is ranked 3rd (behind New York and London) and Shanghai 4th. It was a marginal advantage with 43% of Hong Kong respondents considering Hong Kong as a highly important financial centre compared to 46% of those in Singapore. Embracing the blockchain has undoubtedly had a positive impact on these ratings. More specifically shanghai is ahead of Hong Kong in terms of its global crypto ranking. However, with Hong Kong being the world most prepared country for cryptocurrency adoption, this ranking is almost certainly set to increase. Through being international financial hubs, Hong Kong and Shanghai are now holding more conferences with both cities hosting financial-technology conferences next week featuring high profile companies such as Binance and FTX. During the Singapore Fintech festival, over 62,000 individuals attended from over 115 countries, alongside 570 exhibitor booths and 850 speakers. In fact, due to popular support, Hong Kong is even extending its two-day global investment summit to three days. According to Paul Chan, Hong Kong has outperformed Singapore among six main aspects: yuan and foreign exchange, the financial markets overall contribution, the stock markets value and total turnover, bonds and asset and wealth management. Resultantly Hong Kong’s economic contribution reached US$76 billion on 2020, which is equivalent to 23% of its GDP and 1.5 times the size of Singapore’s.