HONG KONG – Cryptocurrency market data provider Kaiko plans to relocate its Asian headquarters to Hong Kong from Singapore, drawn by the city’s push to establish a global hub for the digital-asset industry.

Hong Kong’s pro-crypto policy pivot and emergence from Covid-19-related curbs contributed to the Paris-based company’s decision, chief executive officer Ambre Soubiran said in an interview on Thursday. Kaiko feeds data to the likes of Deutsche Boerse and ICE Global Network.

“With all of the recent changes and initiatives from the Hong Kong regulatory bodies, we realised that this is clearly where we have to be, where the capital is going to flow in, and where we are seeing a lot of attractiveness when it comes to hedge funds, investors and asset managers,” Ms Soubiran said.

Hong Kong is trying to develop crypto rules that will encourage growth and protect investors, seeking to learn lessons from bankruptcies like the FTX exchange while positioning for a rebound from a US$2 trillion (S$2.7 trillion) market rout.

The city plans to let retail investors trade larger tokens like Bitcoin and Ether later this year. A mandatory licensing regime for stablecoins – a type of crypto token that is meant to hold a constant value – is due by 2023 to 2024.

The developments in Hong Kong contrast with a sweeping crackdown on crypto in the United States, where digital-asset firms are also increasingly cut off from the traditional banking sector after a trio of lenders collapsed. Singapore, meanwhile, has proposed tighter rules in the wake of the FTX wipeout.

Hong Kong’s “regulatory landscape is changing positively”, said Ms Soubiran. She added that she wants to “make sure we can support that institutionalisation and that kind of growth and establishment of the asset class in Hong Kong”.

Challenges

A major challenge for Hong Kong is that the crypto industry remains in a deep downturn after a bubble in token prices deflated in 2022 and investors fled. Exchanges Coinbase Global, Crypto.com and Huobi are among a slew of firms that have slashed thousands of jobs in the past few months.

Other firms are in a holding pattern as they await a crypto recovery and the final version of Hong Kong’s revamped digital-asset rules before deciding whether to commit scarce investment funds.

Kaiko said head of Asia-Pacific Sean Lawrence will relocate from Singapore by the end of March. Figuratively “something like nine out of 10 people” in crypto are discussing returning to Hong Kong in some way, Mr Lawrence said in an interview.

A new Hong Kong licensing regime for crypto exchanges is due on June 1. The pivot towards fostering the digital-asset sector is part of a wider effort to restore Hong Kong’s credentials as a cutting-edge financial centre after Covid-19-related curbs and political unrest sparked a brain drain. BLOOMBERG