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Positioning for growth in Hong Kong’s evolving digital assets markets
Hong Kong has evolved rapidly into a global beacon for the issuance and trade of digital assets, with investors attracted to the city’s growing liquidity and to incentives and guardrails provided by a proactive regulator.
Innovation within the space has seen not only crypto spot and futures ETFs flourish, but also the issuance of the world’s first blockchain-based, multi-currency green bond.
The market is now anticipating more, with the establishment of a stablecoin sandbox earlier this year set to see more digital products hit the market.
The demand for new investment opportunities including ETFs has been strong for both institutions and retail investors, including family office, who are relatively new to the asset class, experts at a recent Bloomberg conference said.
Global demand goes local
A conference speaker shared that digital asset is a fast-growth market, with more than $100 billion invested in at least 245 crypto ETFs worldwide, and Hong Kong has responded enthusiastically to capitalizing on this growing market.
The Securities and Futures Commission (SFC) has approved five bitcoin and ether spot and futures-based ETFs in the city, launched by China AMC, Bosera, Harvest, CSOP, and Samsung.
More digital investment products are in the pipeline too, stablecoins among them. These are digital assets tied to fiat currencies that are seen as essential to anchoring the asset class into regular markets. Several stablecoins are being considered for inclusion in a sandbox programme devised by the Hong Kong Monetary Authority (HKMA).
Additionally, a robust cross-border market infrastructure that provides a bridge to the huge market in mainland China is expected to bring firepower to new markets. So-called dim sum bonds, for instance, facilitate investment in both directions across the frontier – including by global firms based south of the border – and can be crafted to embrace digital assets.
The characteristics of the Hong Kong market that make it attractive to other asset investors also apply to digital assets. Its low-tax fiscal regime operates within a business-friendly environment backed by a strong legal system.
Strong regulatory backing to foster growth
A regulatory framework engineered by the SFC and HKMA to provide a supportive environment for investors is enabling Hong Kong’s rise as a digital power. The rapid approval of crypto ETFs, the licensing of trading platforms, and the stablecoin sandbox have boosted confidence in Hong Kong’s potential to be a regional hub.
Tokenization: A democratizing force in investing
The same drivers of demand for digital assets – principally institutions and family offices – would likely clamor for more tokenized products. The cost of trading them is lower and execution is instantaneous – an important consideration amid the operational expense being incurred to meet T+1 post-trade settlement rules.
Hong Kong has the infrastructure in place to accommodate an expansion of its tokenized offerings, and it is at no greater disadvantage than its competitors in terms of the challenges that tokenization presents. Ensuring trusted and secure data, and formulating roadmaps to advance from product proof-of-concept stages are difficulties faced by product manufacturers worldwide.
Technology is crucial to seize new opportunities
With Hong Kong’s prospect of strengthening its position at the digital asset vanguard, market participants will look to update their data and technology stacks to take advantage of the coming opportunities. That’s likely to be the case for wealth managers and family offices especially, which are less likely to have the expertise or tools to operate optimally within the digital space.
Technology will also be crucial in meeting the fast-changing regulatory obligations as well as to enable firms to tap new opportunities associated with the market.
@ Newshounds News™
Read more: Bloomberg
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BIS Codifies VSD Policies, Removes Caps on Non-Egregious Base Export Penalties
13 Sep 2024 by Ian Cohen
A new final rule issued by the Bureau of Industry and Security this week will codify a host of updates the agency made to its administrative enforcement policies over the past three years, including measures to help BIS more quickly resolve minor voluntary disclosures and increase penalties on exporters who choose not to report serious violations.
Other changes will give BIS broader discretion to impose higher fines, including by eliminating language that had capped maximum base civil penalties for “non-egregious” violations.
@ Newshounds News™
Read more: Export Compliance Daily
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BRICS NEWS: WILL SAUDI ARABIA’S DITCHING OF THE PETRODOLLAR OPEN THE DOOR FOR BITCOIN AND XRP IN OIL SETTLEMENTS?
▪️US dollar under serious threat as Saudi Arabia’s top official discloses that the country is open to using Yuan for crude settlement amid the upcoming BRICS Summit.
▪️However, the US could “put up a fight” as former president Donald Trump proposes 100% tariffs on countries moving away.
The de-dollarization strategy is still on as Saudi Arabia seeks to implement the BRICS long-term goal by moving away from the Petrodollar to the Petroyuan. While the Middle Eastern country has not yet joined the alliance, it has been invited to attend the 2024 summit.
Before its official acceptance, Saudi Arabia doubled its effort to strengthen its existing relationship with China by incorporating Chinese products such as the C919 passenger jet, electric vehicles, and renewable energy infrastructure.
To take this relationship to the next level, Saudi Minister of Industry and Mineral Resources Bandar Al-khorayef has disclosed that the country is open to new ideas, including using yuan in a crude settlement. According to him, their decision hinges on the country’s best interest, as they try not to mix politics with business.
The petroyuan is not substantial to [the ministry]; we believe Saudi Arabia will do what’s in its best interest … but I think Saudi Arabia will always try new things and is open to new ideas, and we try not to mix politics with commerce.
According to experts, the broader use of petroyuan is seen as the next step for the internationalization of the Chinese currency and a challenge to the US dollar’s dominance. Beijing’s effort to advance the reach of the Yuan in international trade is evident in the three-year currency swap deal signed with Saudi Arabia last year. This deal was worth 50 billion yuan (US$7.1 billion) and demanded that trading partners trade in local currencies.
Saudi Arabia Defends Idea, BRICS Alliance Receives Massive Interest
Saudi Arabia is China’s second-largest source of crude export and a formidable entity in global supplies. This implies that ditching the Petrodollar could greatly impact the US economy.
Speaking on this possibility, Khorayef explained that its monitoring policy is based on balancing the exchange rate between the yuan and the US dollar. However, he did not provide a timeline for when this would happen.
This gives us a great opportunity to plan and compete, but most importantly, it gives our investors who will invest in our country the ability to hedge their risk on currency…From a commercial point of view, between a supplier and a customer, I think such an arrangement can happen with the freedom they have. It is not something that we would look at from a policy point of view.
Conversely, BRICS is increasing its effort to mitigate the reliance on the US dollar by designing its native currency.
Fascinatingly, this idea has resonated with over 50 countries which have expressed interest in joining the alliance. According to our previous report, all interested countries are located within four main continents – Asia, Africa, South America, and Eastern Europe.
According to analysts, However, the US is willing to strongly resist this expansion as presidential candidate Donald Trump threatens that the BRICS initiative and the successful implementation of the pretroyuan idea could position Bitcoin and XRP as places of exploration. his administration would impose a 100% tariff on these countries. As we explained, Trump has also proposed a 60% increment on all Chinese imports when elected into office.
@ Newshounds News™
Source: Crypto News Flash
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In-Depth Study Reveals Stablecoins as Pivotal Players in Global Finance
As digital economies evolve, stablecoins emerge not just as mere facilitators for crypto trading but as pivotal tools in global financial systems. A comprehensive report by Castle Island Ventures and Brevan Howard Digital, sponsored by Visa, unveils the profound impact of stablecoins on monetary dynamics worldwide.
Transforming Global Finance: The Rising Influence of Stablecoins
According to the Castle Island Ventures report, stablecoins, once primarily used as trading tools within the cryptocurrency space, are now integral to more traditional financial transactions.
This transformation reflects a significant shift from their initial purpose, highlighting their importance beyond the crypto-sphere.
Researchers point to a staggering $2.6 trillion in transactions settled through stablecoins in the first half of 2024 alone, indicating their growing prominence as a reliable medium for both everyday and large-scale financial activities.
The report notes that over 20 million addresses engage with stablecoins monthly, highlighting their critical role in the financial practices of both individuals and businesses globally.
In emerging markets, stablecoins are increasingly preferred for their ease of use and reliability, providing a digital alternative to traditional banking systems that may be inaccessible or unreliable.
This trend is particularly pronounced in regions with volatile economic conditions, where stablecoins offer a semblance of stability and security. The report states:
Stablecoins are particularly appealing when dollar banking is non-existent or hard to access, in countries exhibiting high inflation, or countries with poor or costly access to fiat transactional networks.
In the report, Castle Island Ventures explained it collaborates closely with regulatory bodies to navigate the complexities of the global financial landscape.
The researchers conclude that evolving regulatory frameworks are crucial for maintaining the integrity and efficacy of stablecoin transactions, which promise to enhance financial inclusion worldwide.
@ Newshounds News™
Source: Bitcoin News
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THIS IS IMPORTANT – New Bill Seeks To Reconcile Regulatory Division Between SEC and CFTC | Youtube
@ Newshounds News™
Source: Seeds of Wisdom Currency Facts
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