Hong Kong issues its first crypto authorization to brokerage firm
- There seems to be division in China on its position towards digital assets as regulators approve crypto trading services for institutional investors.
- This action is likely due to the fear of missing out on Bitcoin's prospects and other blockchain-based currencies.
China may be sending conflicting signals to investors as their approval of cryptocurrencies trading with Fidelity backed brokerage firm contrasts with previous reports of stamping out mining within the region.
China FOMOs into Bitcoin
Notable Chinese cryptocurrency journalist Collin Wu announced that Hong Kong had released a permit for trading digital assets. The license, which happens to be the first of its kind, will allow OSL Digital Securities to serve as an intermediary for market participants who will buy and sell Bitcoin, Ethereum, and security token offerings (STO's).
Breaking: Hong Kong, China issued the first crypto license to OSL. The license allows OSL Digital Securities to operate regulated digital asset brokerage and automated trading services, including BTC, ETH, and STOs. pic.twitter.com/rM8PXd8WhA
— Colin Wu（Wu Blockchain） (@WuBlockchain) December 15, 2020
According to Wu, this brokerage service will be open to only corporate investors seeking to secure digital assets worth over 8 million HKD (approximately $1.032 million). He added that there are concerns about whether or not this move will positively affect Beijing's stance.
The development presents an argument that China is seeking desperate measures not to miss out on the prospects of BTC and other digital assets without going back on its word by providing a gateway for institutional investors to allow easy access. In September 2017, regulatory authorities imposed a ban on cryptocurrency operations, including initial coin offerings (ICO's). This action, which accounted for a 6% drop in Bitcoin price, is one of the country's many efforts to strangle the crypto-related ventures.
In a bid to suppress mining activities, the Chinese government introduced a drastic hike in electricity tariff. Wu, who also reported the incidence, carried out a survey, said that about $74% of the miners struggled with the change and hoped to relocate to a more friendly environment.
This sudden twist of events can be attributed to the growing interest in the number of net worth individuals and organizations who now see Bitcoin as an inflationary hedge. As these fundamental factors continue to build in favor of cryptocurrencies, it will only be a matter of time before it takes full grip of the global economy.
Author
FXStreet Team
FXStreet
Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.
