Cryptocurrency market in China may benefit from new regulations

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Cryptocurrency market in China may benefit from new regulations

By implementing anti-crypto regulations in China, Hong Kong may offer a potential tailwind for East Asia, a Chainalysis report reads.

The growing popularity of Hong Kong as a cryptocurrency hub has raised the prospect of a surge in the value of Hong Kong as a hub for cryptocurrencies.

In the following years, a crackdown on virtually all things crypto saw activity decrease drastically over the past few years.

Crypto trading volume has now dropped from one to five in the region.

Over the past few years, it has fallen behind North America, Western Europe, Middle East and North African countries, Eastern Europe and Central & Southern Asia.

By facilitating the exchange of cryptocurrencies between two parties, OTC desks enable crypto to fiat on and off ramp through direct exchange of cryptocurrencies between two parties outside of a traditional crypto exchange.

In comparison, Hong Kong also had a higher volume of substantial transactions of $10 million or more compared to other East Asian nations, such as Japan and South Korea. These high-volume trades accounted for 46.8% of Hong Kong's crypto trades for the year, Chainalysis said.

The least institutional-driven market in the region is South Korea, according to the report.

It also read that 'informal, gray market peer-to-peer businesses' and OTC desks are the main sources of crypto activity in Hong Kong and China.