Hong Kong’s High-Stakes Dance Between Finance and Freedom

Hong Kong has long been a place where money moves fast and nothing stays idle. From its early days as a British trading outpost to its modern status as a global financial hub, the city seems to have built its identity on the principle of ‘free-market dynamism’ alongside a canny understanding of capital. 

It is this very financial DNA that made Hong Kong an early contender in the crypto revolution, with the city quietly (and sometimes not so quietly) playing a pivotal role in the evolution of digital assets over the past decade. In the 2020s, while regulators elsewhere dithered, Hong Kong entrepreneurs and traders were already diving deep into crypto, with the city laying claim to some of the world’s first Bitcoin ATMs and popular crypto meetup groups.

By mid-decade, Hong Kong had birthed several crypto giants, including Bitmex, a crypto derivatives trading platform famous for inventing the perpetual Bitcoin futures swap feature. Not only that, other early exchanges and projects — ranging from Bitfinex to Tether — too had deep roots or key operations in the city’s fintech-friendly environment. 

Reinvention time

After a brief lull in the late 2020s, when regulators access the globe started to take a cautious stance against the industry, Hong Kong once again strove to take up its mantle as a global crypto hub. To this point, in 2021, while China imposed a blanket ban on crypto trading and mining (across the mainland), Hong Kong chose a completely different path by deciding to forge a more hospitable ecosystem. 

For example, officials from the region opened the doors to digital assets in a big way, with the HK Securities and Futures Commission (SFC) rolling out a licensing regime for crypto trading platforms during mid-2023. Not only that, by Q1 2025, Hong Kong had issued nine licenses for virtual asset exchanges and even launched Asia’s first spot Bitcoin and Ethereum exchange-traded funds, with the SFC also announcing its plans to expand licenses to cover crypto custody and over-the-counter (OTC) trading platforms.

This hard pro-crypto pivot did not go unnoticed by companies and talent as by the start of 2024, at least 80 cryptocurrency firms – from startups to major exchanges – had expressed a keen interest in setting up shop in Hong Kong. Even more striking was the fact that Hong Kong’s crypto-friendly stance was able to draw the interest of state-affiliated Chinese banks. 

Regulators furthered institutional adoption and made the city the de facto crypto hub of the Greater China region, something that is best evidenced by the fact that in 2024, the city’s crypto transaction volume shot up by 85.6% year-on-year – the fastest such growth in the whole of East Asia.

Lastly, it bears mentioning that 42% of high-earning residents in the region reported having invested in crypto, with two-thirds of these individuals claiming that they had already amassed solid profits from their digital asset investments..  

Voices of VALR 

All of the aforementioned threads, be it Hong Kong’s history, culture, and crypto trajectory, came together in a recent episode of VALR’s “Unfiltered: Money, Meaning & Society” podcast titled “Hong Kong, the Original Crypto City.” The sit-down between company CMO Ben Caselin and Kevin Lee, Chief Business Officer of Gate.io, sought to explore the question, “What makes Hong Kong tick?”. 

Over the course of their warm, candid conversation, they painted a picture of Hong Kong that was both affectionate and clear-eyed. One of the key insights that emerged from the discussion was that Hong Kong’s status as a financial innovator wasn’t an accident, rather it was been rooted in the city’s culture of survival and hustle. 

Caselin and Lee both remarked on Hong Kong’s “survival-driven” mentality, a legacy of its refugee and immigrant past where hard work and financial acumen were necessary to thrive. 

Moreover, Caselin and Lee noted that average Hongkongers were often surprisingly sophisticated investors; thanks to their widespread exposure to stock trading and property speculation, which made their leap into crypto not as foreign here as it might have been elsewhere. 

Caselin further observed that the city’s populace possessed a level of financial literacy – or at least financial courage – that created a fertile ground for new instruments, adding: “Hong Kong is comfortable with innovation if it promises returns. Almost everything, from wine to golf memberships, is commodified in Hong Kong.“

The statement resonated with Lee, who reflected on how normal it was for Hong Kong families to discuss IPO subscriptions or to treat a bottle of Bordeaux like an investment. This all-in attitude toward wealth-building, in their opinion, set Hong Kong up to be a “crypto city” before the term even existed. When Bitcoin came along, it was just one more asset class to embrace.

A city, inspired!

As the conversation drew to a close, the two speakers turned toward the future (where their tones seemed to converge in optimism). Hong Kong’s potential role in global crypto adoption, they suggested, was both unique and significant, with the city potentially serving as a gateway in multiple senses. 

For the massive population of investors in mainland China (who have largely remained cut off from direct crypto interactions), Hong Kong is the closest thing Chinese investors can have to legally interacting with this yet nascent market. Similarly, when looking beyond China, Hong Kong offers a bridge between the Western crypto industry and Asia, since it has the English-speaking, common-law infrastructure to deal with American and European institutions, while also being physically and culturally in Asia. 

Last but not least, VALR’s Caselin emphasized that whatever shape it takes, Hong Kong’s crypto journey stands to be closely watched by the rest of the world as it has the potential to serve as a template for other global financial hubs to follow (at least, in the near-to-mid term).