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An analysis of data recently published as part of Chainalysis’ Global Cryptocurrency Adoption Index demonstrates that Hong Kong has recorded a year-on-year crypto transaction value growth rate of 85.6%.  On that basis, the territory accounts for the sixth-largest crypto economy in the world. Furthermore, Hong Kong ranks 30th in terms of global crypto adoption. That’s an improvement of 17 places, as it was ranked 47th in 2023. Regulatory framework aiding crypto adoptionAn excerpt from the 2024 Geography of Cryptocurrency Report by Chainalysis was published on September 18. It found that the steps taken in the Chinese autonomous territory in terms of laying down a regulatory framework for digital assets has led to this uptick in transactional activity, due to the increased adoption of digital assets by institutions.  Over the course of the past eighteen months, Hong Kong has launched crypto trading licensing. Earlier this year, exchange-traded funds (ETFs) were given the green light, with the subsequent launch of Bitcoin and Ethereum ETF products.  On the topic of ETF’s, Kevin Cui, CEO of digital asset trading platform OSL said that “as market conditions improve, we are seeing indications of a growing institutional interest that could lead to increased capital inflows in the near future.” Meanwhile, the Chinese autonomous territory is working towards the establishment of regulations that cover the issuance and trading of stablecoins.lil artsy on PexelsHong Kong key to Chinese crypto resurgenceIn terms of crypto adoption, mainland China ranked 11th this year, dropping down one place by comparison with last year. The report notes the complicated history China has had with cryptocurrency in recent years, given that a crypto trading ban remains in place. However, last year’s report pointed to the strong usage of centralized crypto exchanges by mainland China residents, which suggests that the ban has either been ineffective or poorly enforced.  The Chainalysis report speculates that “Hong Kong may finally influence China to re-open its doors to crypto.” This is not the first time that Chainalysis has made such an assertion. In last year’s report, it made a similar claim, suggesting that the development of Hong Kong as a crypto industry hub would lead to a softening in the stance of mainland China towards crypto. This year’s report suggests that mainland China residents have turned to over-the-counter (OTC) platforms in order to access crypto as a means towards preserving their wealth. The report quoted Ben Charoenwang, associate professor of finance at the INSEAD Asia Campus as stating: “Nowadays, if you want to move money out of China through traditional unofficial means like using mules, fees can be as high as 25 to 30 percent. The increasing use of OTC crypto in China suggests that people are looking for faster options to move money.” The report finds that five of the top 50 grassroots adopters of crypto, South Korea, China, Japan, Hong Kong and Taiwan, are located in East Asia. South Korea leads the region in terms of the most crypto value transacted metric. Chainalysis suggests that South Korea’s strong interest in altcoins signals that it will remain a leader in the region from a cryptocurrency innovation perspective.

X-TICKET teams up with Catalyze Research for XRPL expansionSouth Korean Web3 performing arts platform X-TICKET has signed a memorandum of understanding (MOU) with Catalyze Research, a Web3 research firm and an official partner of Ripple, to jointly expand the XRP Ledger (XRPL) ecosystem and support the integration of Web3 into Korea’s performing arts landscape.Photo by Kanchanara on Unsplash“We are delighted to work alongside Catalyze Research. The XRPL ecosystem, together with XRP, is poised to play a significant role in bringing the Korean performing arts industry onto the global stage. We hope to create synergies through collaborations with Korean cultural performances,” said X-TICKET CEO Shin Yong-un.Leading a new era of event ticketingX-TICKET harnesses blockchain technology to provide digital collectible tickets for performing arts shows, including live musicals like “Cats” and “The Phantom of the Opera.” This service is expected to revolutionize the industry by preventing various problems that tend to occur with ticketing, such as duplication, loss and scalping, thus fostering a secure, transparent and efficient performing arts ecosystem. The platform recently launched its beta version and held a sales event for NFT tickets to “The Phantom of the Opera” shows.Pioneering Web3 solutionsCatalyze Research, on the other hand, specializes in Web3 and blockchain research and consultations. The firm teamed up with Ripple in July to expand the presence of XRPL in the Korean market — a decentralized, public blockchain for businesses and developers — and encourage participation in the XRPL developer community.“Catalyze Research is actively engaged in numerous collaborations to expand the XRPL ecosystem. We plan to implement blockchain technology into X-TICKET and the Korean performing arts sector to extend the ecosystem’s reach,” the firm stated.The partnership between the two enterprises represents a significant step forward in the intersection of technology and the arts in Korea.

HKEX Launches Blockchain-Based Settlement PlatformHong Kong Exchanges and Clearing Limited (HKEX) has unveiled a blockchain-based settlement platform in a move that could potentially transform the landscape of international stock trading, bolstering transparency, efficiency, and operational security.Photo by Ruslan Bardash on UnsplashHKEX SynapseAccording to an announcement on Wednesday (local time), the new platform is called Synapse, and it is set to launch on October 9. The platform utilizes smart contracts developed in the DAML programming language, offering a range of benefits for market participants.Synapse’s primary objective is to streamline post-trade workflows, minimize settlement risks, and enhance transparency in the financial markets. It will be deployed on HKEX’s Stock Connect, a program that allows international investors access to over 1,000 mainland Chinese stocks through Hong Kong routing.With an average daily turnover of RMB 109.3 billion ($15.18 billion) in the first half of 2023, up 5% from the previous year, with a 50% increase from 2020 levels, Stock Connect has established itself as an important channel for international investment.DAML-based smart contractsOne of Synapse’s standout features is its use of DAML, an open-source smart contract language. DAML has the capability to synchronize data across both blockchains and centralized databases, which can significantly improve operational efficiency. By incorporating smart contracts into the settlement process, Synapse enables automatic generation of settlement instructions, reducing the time and manual effort required for trade confirmation. This not only reduces the likelihood of errors but also accelerates settlement, enhancing liquidity and boosting investor confidence.Additionally, Synapse facilitates concurrent processing by simultaneously generating settlement instructions for all parties involved in the trade. This near-instantaneous status update mechanism is especially crucial when connecting traders across different markets. HKEX’s connection to Hong Kong’s Depository Trust and Clearing Corporation via its Institutional Trade Processing service further centralizes cross-border transaction matching, creating a robust ecosystem for seamless trading.Synapse’s launch reflects HKEX’s interest in nurturing international participation where Mainland China’s equity markets are concerned. Glenda So, HKEX Group Head of Emerging Business and FIC, expressed her enthusiasm for the platform’s potential to strengthen both market and investor growth strategies. She believes that Synapse will not only enhance post-trade efficiencies but also contribute to building a more resilient financial ecosystem.Established interest in crypto/blockchainThis is not HKEX’s first expression of interest in blockchain-based technology. In a report it published earlier this year, the Hong Kong stock exchange concluded that crypto exchange-traded funds (ETFs) have the potential to play an important part in building the next phase of digital asset expansion in Asia. Trading in the first crypto ETFs commenced on the platform in December of last year.It’s worth noting that Hong Kong has been rapidly evolving into a hub for Web3 firms, further emphasizing the importance of platforms like Synapse to enhance the efficiency and security of financial transactions in this dynamic environment. While developments in the crypto space are ongoing, Synapse’s blockchain-based settlement platform represents yet another milestone in the evolution of crypto and blockchain-centric financial infrastructure in the region.