OKX is nearing the final stage of obtaining a virtual asset provider license in Hong Kong. Once approved, the exchange will be able to engage with banks and financial institutions for operations. Meanwhile, HashKey became the first company to receive a VASP license in Hong Kong, allowing it to expand its services to retail users. OKX is also looking to enter the Indian market despite regulatory challenges.
Our analysis of the situation
In an exciting turn of events, the ever-popular OKX crypto exchange finds itself teetering on the precipice of obtaining a much-coveted virtual asset provider license (VASP) in Hong Kong. Sources indicate that the exchange is currently in the final stages of the approval process, with a potential final nod expected sometime in March 2024.
According to OKX's global chief commercial officer, Li Zhikai, the exchange is already in talks with several banks and financial institutions eagerly awaiting the opportunity to collaborate once the VASP license is secured. It's worth noting that traditional banks have long viewed the cryptocurrency industry with skepticism. However, last year saw a change in wind as the Hong Kong government openly embraced digital assets, urging banks to devote greater attention to the sector.
Although the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority have encouraged such engagement, Zhikai amusingly predicts that the number of approved licenses in the following year might not be as copious as expected - an open opportunity for pioneers like OKX.
Breaking new ground, OKX's recent strides towards licensure will soon find them in good company. Just last month, crypto exchange and trading platform HashKey became the first to obtain a license in Hong Kong as a retail crypto service provider under the new regulatory guidelines. The landscape of cryptocurrency trading is shifting, and Hong Kong is taking a markedly different stance from its neighboring China, which remains cautiously guarded in its approach to most crypto assets.
The surge of interest in Hong Kong as a cryptocurrency hub is palpable, with over 80 companies, both local and foreign, signaling their intent to set up shop in the region. This burgeoning enthusiasm is fueled by Hong Kong's welcoming stance on cryptocurrency trading, yet it is worth noting that only a few, including OSL and HashKey, have received licenses to provide retail services. Remarkably, HashKey kick-started its crypto services in August last year, offering select digital assets such as Bitcoin (BTC) and Ether (ETH). The Hong Kong SFC's prudent approach restricts approval to these popular assets as a precaution to mitigate trading risks.
While Hong Kong's crypto scene embarks on this thrilling journey, the news of OKX aims to tantalize us with yet another surprise. In a recent interview, Haider Rafique, OKX's Chief Marketing Officer, revealed the exchange's aspirations to venture into the Indian market, despite the regulatory challenges present. Rafique expressed a genuine desire to learn from and work alongside the vibrant Indian crypto community, equipped with the belief that OKX has plenty to offer despite the local regulatory stiffness.
To pave the way for such expansion, it's vital to address the current situation in India. The imposition of a 30% tax on all crypto gains in the country and a further 1% tax deducted at source (TDS) for all crypto transactions has undoubtedly impacted the domestic crypto trading landscape. Reports suggest that as a result, billions of dollars worth of crypto trading volume have shifted to foreign exchanges, leaving local exchanges reeling from reduced activity.
Despite these setbacks, there remains hope for a revival of the Indian crypto ecosystem. Organizations such as the Bharat Web3 Association propose reducing the TDS to a more favorable 0.1% or even 0.01% as a means to rekindle interest among Indian investors.
As OKX stands on the precipice of securing the Hong Kong VASP license and eyeing the Indian subcontinent, the convergence of traditional banking and cryptocurrency seems closer than ever before. Watch this space as OKX navigates regulatory landscapes and embraces the spirit of collaboration, bringing a touch of innovation to the world of finance and aligning diverse communities along the way.
Disclaimer: The views and opinions expressed in this blog post are solely those of the author and do not necessarily reflect the official policy or position of any agency or organization. The author is a ghostwriter hired to create engaging content on the given topic.
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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