Hong Kong continues to bolster its digital finance sector.
Amid the onset of new regulations for retail cryptocurrency trading in Hong Kong, the Seychelles-based cryptocurrency exchange Huobi became the first member of the newly formed Hong Kong Virtual Assets Consortium (HKVAC).
The announcement came on May 31st, just before the new regulations came into effect.
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The emergence of HKVAC comes at a pivotal time in Hong Kong's financial landscape, with the new regulatory framework for cryptocurrency trading coming into play on June 1st.
Although the HKVAC website currently only features "illustrative" data, it is set to offer ratings for digital asset exchanges ranging from AAA to D, predicated on a continuous evaluation of nine trustworthiness criteria.
Additionally, the consortium is expected to develop two indexes. First, the Cryptocurrency Large Market Cap Index will focus on the top 30 cryptocurrencies by market cap, determined by a seven-day median, alongside other conditions and quarterly rebalancing. The second, the Cryptocurrency Risk Rating Based Index, will offer a risk-based perspective on digital assets.
In anticipation of these changes, Huobi has already rolled out its Huobi Hong Kong exchange, marking its entry into the evolving marketplace. Huobi remarked on its participation in the HKVAC, stating:
<HKVAC> was established primarily to enhance the industry’s capabilities in security risk management and to assist the Central Government and Hong Kong’s local authorities in building a world-leading hub for virtual asset and digital finance.
Moreover, Huobi has expressed its intention to "develop a venture capital database that caters to the needs of the market" through its involvement in the consortium.
Among other partners in the HKVAC, as reported by local news outlet PANews, are FrancXav Asia Ratings, G-Rocket Global Accelerator, Hong Kong Data Infinity Technology, HKVAEX, Ipollo, KuCoin, LK Venture, Nano Labs, Purise, and Wealthking Investment Limited.
The inauguration of the HKVAC, with Huobi as its first member, signals a critical step forward in Hong Kong's digital finance sector as the city adapts to regulatory changes. With its emphasis on enhancing security risk management and its commitment to the development of a world-class hub for digital finance, the consortium stands to significantly influence the future trajectory of the cryptocurrency landscape in Hong Kong.
