UBS extends crypto ETF access to clients in Hong Kong

Nearly five years have passed since South Korea’s second-largest city Busan was designated as a blockchain regulation-free zone (blockchain zone) in July 2019. This designation has allowed blockchain companies to run their businesses within the region’s regulatory sandbox, freely exploring the potential of the cutting-edge industry. Busan is the only city in Korea to have won the bid for running more than two regulation-free blockchain projects approved by the SME ministry. However, Busan city may soon lose its status as the blockchain zone, unless it develops and attracts new blockchain-related businesses, local news media KBS News reported. The city has been struggling to attract new blockchain businesses after its 10-month-long preparation to enact a law, which would have enabled startups to enroll in indemnity insurance, resulted in failure.  Photo by Alexander Smagin on UnsplashBlockchain startups on the brink of closing its services Among the blockchain companies operating in the blockchain zone is Busan Blockchain Real-estate Investment Currency (BBRIC), which allows users to invest in real estate with a budget as small as KRW 1,000 ($0.75). Park Hyo-jin, Vice CEO of Sejong Telecom operating BBRIC, expressed his concerns in an interview with KBS News, saying that the termination of the city’s status as the blockchain zone would make it difficult for BBRIC to continue its services. Another blockchain startup in the region’s blockchain zone emphasized the importance of maintaining the city’s status in an interview with the press. Kim Yong-gil, the chief research officer at a blockchain-driven solution firm, said the company he’s working for was able to lay the foundation for its business growth after it was selected as one of the first companies to operate within the blockchain zone in 2019. The company currently aims to expand its distribution business from fisheries to coffee industry.  At the moment, 43 blockchain companies like these are operating their offices at the Busan International Finance Center (BIFC). Among 15 of them have relocated to Busan from the outside region to benefit from the sandbox. Busan’s loss of its status would also result in these companies leaving.  Busan’s desperate bid to retain its status as blockchain zone To retain the blockchain startups, the Busan government must maintain its status as the blockchain zone by getting permission to extend the designation period. Kwon Ki-kwang, Head of the Blockchain Regulation-free Zone team at Busan Technopark – a public foundation that supports SMEs – stated that it is looking for businesses specialized in blockchain technology, including those focused on blockchain-driven voting systems.  

Bitget Report Finds Gen Z Dominates Crypto Copy TradingA recent report by Bitget, the Seychelles-headquartered crypto exchange, sheds light on the growing trend of copy trading among younger investors, particularly Gen Z.Photo by rc.xyz NFT gallery on Unsplash44% under 25The report, released on Thursday, reveals that an impressive 44% of all copy traders on the platform are under the age of 25, indicating a strong inclination among this generation towards this type of investment and trading strategy.Copy trading, or social trading, involves emulating the trading activities of established investors. Bitget’s findings indicate that the younger demographic is more receptive to this approach, with individuals aged 25 to 35 constituting just under one-third of all copy traders. Comparatively, individuals aged 35 to 55 represented 17% of copy traders, while those over 55 constituted a mere 7%.Reliance on influencersInterestingly, this trend aligns with Generation Z’s penchant for seeking advice from social media influencers. Bitget’s report highlights that Gen Z’s tendency to turn to these influencers for investment decisions could be a driving factor behind their affinity for copy trading.A survey by Forbes Advisor in January found that approximately 80% of both Gen Z and millennials rely on financial advice from social media platforms. Notably, platforms like YouTube, Reddit, and TikTok have gained their trust, with half of the respondents claiming to have profited from advice received.The report also reinforces crypto’s status as the preferred investment choice among Gen Z. A joint study by the CFA Institute and the Financial Industry Regulatory Authority (FINRA) Foundation in May revealed that crypto was the most popular investment option for Gen Z in the United States, a striking 44% of Gen Z investors initiated their investment journey with cryptocurrencies, surpassing the 35% of millennials who did the same.Geographical differencesThe trend extends beyond the US, with 43% of British and 35% of Canadian Gen Z investors indicating crypto as their inaugural investment.Geographically, Bitget’s report showcases intriguing patterns among its copy-trading user base. While nearly a third of users hail from Western Europe, almost half originate from East or Southeast Asia. This distribution highlights the global reach of the platform and the appeal of copy trading across diverse regions.Of note, despite constituting only 1% of Bitget’s global copy traders, a remarkable 62% of African users expressed interest in copy trading. This proportion stands as the highest among all regions surveyed, reflecting a growing appetite for innovative investment methods on the African continent.Bitget’s report underscores the evolving landscape of investment practices, with Generation Z at the forefront of embracing new approaches like copy trading. It also builds on prior initiatives and research undertaken by the firm. In May Bitget launched a corporate social responsibility (CSR) project titled “Blockchain4Youth.” That initiative revealed that Bitget understands that the younger generation is where the greatest opportunity for mass market adoption lies for crypto and Web3.As the influence of social media on financial decisions continues to rise, the crypto industry may see further shifts in investment patterns and strategies among different demographic groups.

Hong Kong securities group proposes ICOs as growth opportunityKey stakeholders in Hong Kong’s financial world are contemplating a transformative shift in the Chinese autonomous territory’s digital asset strategy that concerns furthering initial coin offerings (ICOs).Photo by Qinyi Lian on UnsplashRoom for improvementIn a recent letter signed by Chen Zhihua, President of the Hong Kong Securities and Futures Professionals Association (HKSFPA) and published to the HKSFPA website on Wednesday, the introduction of an ICO mechanism as a potential catalyst for the city’s economic revival has been proposed.The letter, which provided the HKSFPA’s “opinions on the 2024–2025 budget,” included the ICO suggestion as recommendation №10 on a list of various proposals. The suggestion comes amid ongoing efforts to navigate the economic challenges posed by the pandemic. Zhihua acknowledges the developmental approach taken by Hong Kong Chief Executive John Lee where financial sector strategy is concerned, but emphasizes the industry group’s belief in the room for improvement that exists to stimulate Hong Kong’s financial sector further.Formalizing ICOsFormalizing ICOs in Hong Kong could establish a supportive environment for crypto startups and investors seeking regulated and secure opportunities. The proposal aligns with a broader call for government engagement in economic recovery and policy-making, emphasizing a collaborative approach toward the crypto sector. This inclusive stance signals a forward-thinking perspective that could lead to more supportive policies and frameworks, fostering a conducive environment for crypto innovation and growth.Reflecting on the history of ICOs, the letter acknowledges the fundraising method’s evolution since the attention garnered by the Mastercoin ICO in 2013 and Ethereum’s significant milestone in 2014. The ICO boom of 2017 saw projects like EOS and Tezos raising substantial funds, accompanied by both enthusiasm for fundraising ease and concerns about investor protection due to minimal regulation.Fraud concernsWhile the ICO boom faced regulatory scrutiny and witnessed instances of fraud and scams, a progressive approach by financial regions such as Hong Kong could reshape the global perception of ICOs. The letter suggests that, under favorable terms, ICOs could play a pivotal role in revitalizing the digital asset landscape.Zhihua underscores the importance of addressing potential challenges by urgently reviewing and enhancing anti-money laundering (AML) and counter-terrorist financing legislation. This cautious approach aims to ensure that ICOs in Hong Kong adhere to established frameworks, avoiding the pitfalls associated with unregulated fundraising.While that’s the HKSFPA’s position, the initial flurry of ICOs a number of years ago involved many projects proposed by scammers and fraudsters. At the time, the Hong Kong Securities and Futures Commission (SFC) recognized the development as “downright fraud” and put pressure on exchanges to delist many tokens.One other related element that the letter proposes is in integrating environmental, social and governance (ESG) and Islamic finance elements into investment immigration policies. This forward-thinking approach reflects a growing awareness of ethical and sustainable investment practices that could potentially position Hong Kong to set new standards for responsible investment.