Hong Kong’s Crypto Future Depends on Breaking Free from Listing Chains

Hong Kong is positioned to become a global hub for virtual assets, rivaling established markets such as the United States and the United Arab Emirates, according to Changpeng Zhao, founder of Binance and widely known as CZ. However, he emphasized that regulatory flexibility and speed are essential to unlocking the city’s potential. Zhao highlighted Hong Kong’s demonstrated commitment to embracing emerging technologies, particularly Web3, and its capacity for rapid policy adaptation, as key factors in its favor. “We shouldn’t evaluate a place’s future potential based on its current status,” he stated, adding that the speed of change should be the primary metric [1].

The Binance founder pointed out that Hong Kong’s current regulatory framework limits retail investors to trading only four cryptocurrencies: Bitcoin, Ether, Avalanche, and Chainlink. These restrictions were introduced by the Securities and Futures Commission (SFC) when it legalized retail crypto trading in August 2023. Tokens must be listed in at least two major investible indices, one of which must come from a traditional finance provider. While this approach aims to mitigate risk, Zhao argued that such limitations are insufficient for fostering a competitive market [2].

To address this, he suggested Hong Kong adopt a model similar to Japan, where exchanges are granted autonomy to determine which tokens can be listed. This flexibility, he explained, would allow the market to evolve more organically while still maintaining regulatory oversight. “The US and UAE haven’t done anything magical,” Zhao said, implying that Hong Kong has the capability to replicate their success through deliberate and strategic regulatory changes [1].

Zhao also noted that Hong Kong has 11 licensed virtual asset trading platforms, but Binance has not yet applied for approval. He is no longer the CEO of Binance, having stepped down in late 2023 as part of a settlement with the U.S. government. However, he remains actively involved in shaping the industry through advisory roles and supporting blockchain ecosystems such as the BNB Chain, which hosts over 4,000 projects [2].

Hong Kong is expected to release a more detailed regulatory framework for digital assets by the end of the year. This would build on its first virtual asset policy, introduced in October 2022, which laid the foundation for the city’s ambitions in the sector. Zhao’s comments come as global regulators continue to adopt divergent strategies, with some markets leaning toward strict oversight while others pursue a more liberal approach to foster innovation [2].

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[1] Binance founder CZ: Hong Kong can rival US as crypto hub, its future hinges on speed (https://www.scmp.com/tech/blockchain/article/3323465/binance-founder-cz-hong-kong-can-rival-us-crypto-hub-its-future-hinges-speed)

[2] Hong Kong Needs Broader Crypto Offerings To Rival US, UAE: Binance Founder CZ (https://cryptonews.com/news/hong-kong-needs-broader-crypto-offerings-rival-us-uae-changpeng-zhao/)