How the Asian IT capital influences global cryptocurrency trends
The Asian market is significantly different from the Western one, not only because of the mentality but also because of the economic situation: capital is exported mainly to Asian countries, which entailed an economic paradox: the “golden billion” is almost completely dependent on supplies from developing and developed countries.
And in this position, industrial centers such as Hong Kong have become real economic hubs in which production and financial flows are concentrated. In the post-industrial era, Hong Kong has also become the center of attraction for cryptocurrency funds. Why? Let's try to consider this issue from all sides with the IQ Option.
General provisions of cryptocurrency projects in Asia
China, despite its leading position both in the production segment and in the field of cryptocurrencies, is very cool, if not cautious, regarding the regulation of various ICO projects that contain concepts such as blockchain and cryptocurrencies.
So, in 2017, the Chinese authorities banned the activities of more than a hundred ICO’s in the state.
In particular, the ban affected offshore companies and crypto exchanges. The same thing happened after in South Korea, which entailed several changes:
- Chinese cryptocurrency companies or companies with offices in China and South Korea began to choose foreign legal addresses.
- International companies nominally left China, presenting the possibility of franchising to subsidiaries with Chinese personnel and Chinese leadership.
After that, in 2018, the authorities of the largest Asian countries (including China) softened the cryptocurrency policy and gave the project a green light, supporting the idea of cryptocurrencies and blockchain as the future of economic relations.
At the end of 2019, despite the spread of the dangerous coronavirus throughout the territory of the Republic of China, the party's policy regarding cryptocurrencies, and Bitcoin and Ethereum (in particular), remains very loyal.
At the same time, centers such as Hong Kong are becoming increasingly dependent on virtual currencies, and that's why the mining centers of these same cryptocurrencies are concentrated in these mega cities.
IQ Option experts have repeatedly stated that the basic cryptocurrency package can shift the focus from the main cryptocurrency pairs to less known ones over time. With a change in the balance of power in Hong Kong and among industrial miners, this can happen already this year, so you should entrust the management of your crypto portfolios to professional traders to choose the most successful bidding and sale of cryptocurrencies.
Cryptocurrencies in Hong Kong
What is noteworthy, in Hong Kong itself, cryptocurrencies have the status of “virtual goods”, therefore they are not subject to regulation by the authorities of the region.
This gives the business room for development. However, after the ban on ICO’s in China, the Hong Kong authorities nevertheless imposed some restrictions on cryptocurrency tokens:
- if cryptocurrency is a property right that allows the owner to distribute income and/or participate in the liquidation of the company, then the SFC will most likely consider it as a share;
- if cryptocurrency is a debt obligation of the issuer payable, then it will be considered as a bond;
- if during the ICO funds will be raised to finance the project, and token holders will receive a part of the income from the project, the tokens will be considered as interest in the collective investment scheme (CIS);
According to the Hong Kong Securities and Futures Regulation, the CIS has the following features:
- contains an agreement on ownership (the concept of ownership is of great importance);
- participants cannot control property management daily (even if they have the right to give directions or give advice on property management);
- the property is wholly under the control of the person carrying out the operations;
- the contract provides for the provision of an income or other benefits from property management.
“Service tokens” in Hong Kong
An interesting point in the issue of regulating cryptocurrencies in Hong Kong is the use of internal tokens in projects that are not regulated by law, even if they have been listed on exchanges and are also cryptocurrencies.
This allows cryptocurrency projects to create their own tokens based on existing cryptocurrencies (in particular, Ethereum).
At the same time, IQ Option experts do not recommend that you completely switch to new tokens that were “internal” tokens yesterday and use already proven cryptocurrencies. This will allow you to be sure that your virtual currency funds will only add to the price, and various scam projects will pass you by.
Hong Kong cryptocurrency exchange regulation
To carry out cryptocurrencies and fiat funds in Hong Kong, you need to obtain a money service operator license, as well as to check for the absence of transactions to sponsor terrorism and purchase weapons (AML / CTF).
Moreover, there is a certain paradox in this: cryptocurrencies do not apply to currency legislatively, but their transactions are financial instruments, which entails regulation.
Blockchain projects in Hong Kong
Hong Kong is one of the leading cities in the world in the field of creating IT startups based on blockchain.
This is due to several factors:
As we know, Hong Kong is one of the most interesting places for blockchain and crypto-projects, because of:
- This city is a transport hub and a center for the production of goods and equipment of the IT-segment;
- Hong Kong offshore zone legislation is loyal to innovative technologies, developments based on blockchain and in the field of crypto;
- Most of China's industrial miners have offices in Hong Kong;
- International crypto exchanges have their offices in Hong Kong, which increases the volatility of the main cryptocurrencies within the megapolis and province.
Local and foreign entrepreneurs very soon hope to expand the possibilities of their work with virtual currencies, especially with bitcoins or Ethereum, and especially under the jurisdiction of Hong Kong. But to move forward, at least minimal changes in Hong Kong's policy on this matter are necessary, which will largely depend on US policy.
Note that just the other day there was news that Apple has already begun to open its doors to the development and implementation of applications designed for translating virtual currencies, although these applications do not violate any laws. This fact may also affect the Hong Kong market, and there will be new opportunities for legalizing this business in Hong Kong.
Cryptocurrency transactions were acquired on Asian and Chinese exchanges and stocks. The deals were very important after the riots and the policy of independence of the region from the power of the Beijing government. So, in the Sai Ying Pun area, a trading platform selling the main cryptocurrencies for paper funds has been successfully operating for several years. In this store, you can easily buy a cryptocurrency for dollars, yuan, yen, and other major currencies.
About IQ Option
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IQ Option specialists are happy to understand the specifics of trading with Chinese exchanges and will help determine the value of Chinese exchanges, exchangers, as well as new cryptocurrencies. Also, IQ Option brokers will help you maintain and increase your cryptocurrency portfolio, no matter where in the world you are.
In Hong Kong and other countries that do not have a special regime for regulating ICO’s, the initial offer of coins is a legal and convenient way to raise the necessary funds through crowdfunding, especially for start-up companies in the field of technology and innovation that are not suitable for venture or bank financing.
The Hong Kong regulator’s restraint regarding ICO restrictions is welcomed, especially given the fact that ICO’s provide vital funding for revolutionary blockchain technology that has huge potential for the Hong Kong economy as a whole.
At the same time, one should not forget that fiat funds are currently experiencing a deep economic crisis and many governments (including the regional authorities of certain industrial areas of China) are working closely with IT companies in the field of blockchain and cryptocurrencies. This will give a new impetus to the development of cryptocurrencies. For example, in the Internet-of-Things segment.
Although the ICO bubble burst, interest in cryptocurrencies did not weaken, but only intensified, which will entail the rapid development of the cryptocurrency market and, it is possible, the emergence of new leaders who can solve the problems of their predecessors and current market leaders (primarily, this applies to network scaling and currency volatility).
At IQ Option, we are interested in ensuring that each of our users receives the optimal solution to improve their well-being.
We believe that cryptocurrencies will save the global economy, but do not forget about commodity exchanges and resources: oil and gold will never fall in price, so if you want to do trading in cryptocurrencies or on world stock exchanges, IQ Option specialists will certainly help you.
What is cryptocurrency?
This is a new type of digital currency that is designed for independent and decentralized trading. This is the next step in the economy.
What is a cryptocurrency exchange?
This is a digital platform for exchanging one cryptocurrency for another at the established rate.
What is a stock exchange?
Stock Exchange – a financial institution that ensures the regular functioning of the organized securities market.