Hong Kong, as one of the world’s most important and influential financial cities, has played a vital role in the development of cryptocurrencies. For example, the Chinese territory has given birth to some of the most well-known and successful crypto enterprises to date, such as FTX, a crypto derivatives exchange, and Crypto.com, a digital asset platform.
Despite the fact that Hong Kong’s crypto exchanges handle trillions of dollars on a daily basis, the “Vertical City” also has a plethora of actual over-the-counter crypto businesses. According to Henri Arslanian, a PwC crypto lead and former chairman of the Hong Kong Fintech Association, the number of traditional OTC crypto brokers in Hong Kong stands out. He explained, “These are literally physical and mortar establishments for the general population.”
Furthermore, an unnamed source told Cointelegraph that when driving about Hong Kong, he couldn’t help but notice a significant increase of OTC crypto exchanges, some of which even offer access to cryptocurrency ATMs.
Hong Kong’s Crypto Culture Made Up Of OTC Retail Outlets
Compared to regions such as the United States or Europe, where buying and selling cryptocurrency on regulated exchanges is relatively simple, Hong Kong‘s actual crypto stores are a unique brand that gives people another method to access bitcoin.
Kelvin Yeung, the CEO, and founder of the Hong Kong Digital Asset Exchange, or HKD, clarified the situation. According to Yeung, the HKD crypto exchange was launched in 2019, the actual shop opened in January of this year, and the company employs over 30 people to provide customer care.
HKD’s shop, according to Yeung, functions similarly to a typical bank, allowing consumers to get a hands-on approach to buying cryptocurrency as well as access to in-person advisory services. When a result, he predicts that as crypto becomes more mainstream, retail outlets will become a global trend:
There will be a trend to develop physical storefronts in conjunction with online platforms as more investors and institutional investors enter the business and digital currency becomes popular.
Because of HKD’s physical presence, Yeung believes that stronger consumer trust is developed between the company and its users. The majority of our users are between the ages of 40 and 70. He explained that having an elder customer base is vital for widespread acceptance because many of these people still use fiat currency and only trust traditional financial systems.
It’s worth noting that these physical locations aren’t simply for the elder age. CoinerHK was created at the beginning of 2020 to focus on the female market, according to Priscilla Ng, founder of Coiner HK, another Hong Kong OTC retail exchange. We wanted to develop a market for women to promote the idea that women can be financially self-sufficient and invest in themselves.
As a result, Ng revealed that CoinerHK’s customers are mostly women between the ages of 20 and 50, with roughly 70% of them selling cash for cryptocurrency. Ng also mentioned that CoinerHK has two physical sites in Hong Kong’s golden district.
From Business Standpoint, Retail Investors Required
While OSL’s efforts are commendable, Arslanian pointed out that a large portion of the money is earned by retail clients buying and selling crypto on exchanges, which draws institutional clients. As a result, he believes Hong Kong’s desire to restrict crypto exchanges to cater primarily to institutional investors is a difficult task. Although this may be true, Walton stated that over the last year, OSL has witnessed a considerable increase in institutional interest.