Leading crypto exchange, is already offering custody services for local ETFs in Hong Kong and is in discussions with HSBC regarding ETF sub-custody arrangements. Despite this, Coinbase revealed that it has no immediate plans to operate fully in Hong Kong.
Coinbase Already Provides Custody Services for Local ETFs in Hong Kong
John O’Loghlen, Managing Director for Asia Pacific and Director in Australia at Coinbase, explained that Hong Kong’s regulatory framework has significant challenges for international platforms.
Note that the regulations require local custody, market makers, and liquidity matching, which would need a complete revamp of the exchange’s technical infrastructure. This would involve adapting Coinbase’s tech stack specifically for Hong Kong’s unique market and liquidity needs. Due to these complexities, Coinbase is taking a wait-and-see approach, awaiting further regulatory developments before committing to deeper engagement in the region.
Hong Kong’s Securities and Futures Commission (SFC) has outlined a roadmap for attracting international platforms, order flows, and liquidity providers. Hong Kong has actively welcomed major virtual asset platforms to conduct business and is working to reduce barriers for institutional liquidity providers, facilitating their connection with local platforms. O’Loghlen acknowledged that while Hong Kong’s regulatory environment has been challenging for international platforms, he is optimistic that the new measures will ease some of the obstacles.
As Hong Kong moves forward with relaxing its regulations, Coinbase has established Singapore as its primary business hub in the Asia-Pacific region. The platform has set up regulated entities in Singapore and Australia, with Singapore offering a favorable regulatory environment. O’Loghlen highlighted that Singapore imposes no restrictions on local liquidity arrangements, making business operations smoother. Moreover, the Singapore Economic Development Board (EDB) has supported Coinbase by providing access to local talent, particularly developers, to help build a team of around 100 people in the region. The platform also collaborates with the Monetary Authority of Singapore in various sandboxes.
Despite these developments, O’Loghlen believes the competition in Asia is far from over. Coinbase continues to provide custody services for local ETFs in Hong Kong and is negotiating ETF sub-custody plans with HSBC. Both mainland Chinese and Hong Kong investors have shown strong interest in digital assets, and O’Loghlen remains confident that Hong Kong has significant potential for success in the digital asset space.
Also Read: Crypto Exchange Coinbase Plans Re-entry into India; In Talks With Authorities
Source: https://www.cryptonewsz.com/coinbase-negotiating-sub-custody-hong-kong/