Hong Kong has the potential to become a new market driver, according to Blofin Academy

2 min readApr 28, 2023

In May of this year, a guideline is expected to be issued defining the procedure for licensing trading platforms for digital assets. This will be handled by the Hong Kong Securities and Futures Commission (SFC).

According to the previously proposed rules, from June 1 this year all centralized platforms operating in Hong Kong or cooperating with local investors are required to obtain a license SFC. Such a measure effectively removes the ban on retail sales of digital assets.

The SFC said it intends to “strike a better balance between investor protection and market development.”

And the Blofin Academy pointed out that the liquidity squeeze, contrary to the expected end of the Federal Reserve’s policy tightening period, will affect the quotations of the main cryptocurrency. This could change if Hong Kong becomes a cryptocurrency hub.

Experts confirmed the threat of a recession or a full-blown crisis if there is an excessive increase in the key rate. Analysts noted that the current 4% premium on annual BTC futures indicates an expected policy reversal by the U.S. regulator.

Blofin Academy believes that the Fed’s rate cut won’t happen before September. Until then, the market may feel the pressure of liquidity reduction.

Prospective for the entire crypto market may be a strengthening of the role of players from Asia amid reduced pressure from the authorities in Hong Kong. As a result, the U.S. influence on the industry may diminish.

“Clearly, Hong Kong has the potential to become a new driver. The capacity of “stable coins” in HKD can rival the USD. Jurisdictional authorities have expressed support for trading platforms that use the local currency. Stablecoins in USD and HKD could be the basis for liquidity. As the bull market develops, Hong Kong’s role will increase,” the company said.