Hong Kong gearing up to give crypto derivatives the go-ahead

Recent statements by figures well placed in the crypto space and within the Vietnamese government point to increased potential for greater adoption of XRP, the payments solution token first developed by Ripple Labs.Photo by Silver Ringvee on Unsplash‘XRP will be big in Vietnam’Yasin Mobarak is a prominent figure within the XRP community. He’s also the founder and managing member of Dizer Capital, a venture capital and private equity firm that specializes in blockchain, internet of things (IoT) and clean energy projects. On Saturday, Mobarak tweeted out: "$XRP will be big in Vietnam." While Mobarak didn’t comment further, he did include a link to an X social media post published by XRP community member Kenny Nguyen, relaying the news that Vietnamese Finance Minister Ho Duc Phoc had announced that the government is currently working with the Vietnamese Central Bank with a view towards studying and possibly implementing the use of XRP for cross border payments. Central Bank's consideration of XRPVietnam's Central Bank is actively exploring the integration of XRP for cross-border payments, both domestically and internationally. This move aligns with the region's swift adoption of XRP, driven by its promise of faster, cost-effective and secure cross-border payment services. Ripple's recent collaboration with TPB Bank, a major player in Vietnam's banking sector, is set to fortify the entire XRP ecosystem. In September 2023, SBI Remit, a financial service provider and subsidiary company of Japanese financial services conglomerate SBI Group, initiated an XRP-based remittance service covering Southeast Asian countries like the Philippines, Vietnam and Indonesia. SBI has a long-standing partnership in place with Ripple aimed at launching international payment services. As part of that announcement, SBI confirmed the participation of Malaysia-based cross-border payments hub Tranglo in the project. Crypto adoption and growthDespite legal constraints, Vietnam emerged as a leader in crypto adoption in Asia in 2023 by claiming the third position in Chainalysis’ 2023 Global Crypto Adoption rankings. The region, still adapting to the global rise of cryptocurrencies, is undergoing a transformation. While centralized exchanges dominate in various countries, regional preferences vary. In the Philippines, a noteworthy 20% of the population engages with crypto sites for gaming and gambling. In contrast, Vietnam and Pakistan distinguish themselves with citizens favoring peer-to-peer exchanges. This approach allows direct trading between individuals, bypassing large corporations. A report produced by Kyros Ventures and Coin68 in conjunction with Hong Kong’s Animoca Brands last year found that 76% of Vietnamese crypto holders determine their investment choices based upon recommendations from friends and people within their peer group. The collaboration between regulatory bodies, financial institutions, government and crypto projects illustrates the growing integration of digital assets into traditional financial systems. This latest example pertaining to Vietnam and XRP certainly offers the potential of a much greater level of adoption in the region. While activity within Vietnam may be a key consideration for XRP investors and stakeholders in 2024, the potential for a Ripple initial public offering (IPO) is also something they’re likely to be watching out for. Over the course of the past six months, a Ripple IPO has been the subject of speculation. That speculative interest has likely increased following Circle, the issuer of U.S. dollar stablecoin USDC, filing for an IPO last week.  

Analysts expect crypto market cap to triple or more next yearThe Korbit Research Center, affiliated with South Korean cryptocurrency exchange Korbit, published a report last Friday that provides projections for the crypto market in 2024.The paper includes contributions from its team, notably head of research Peter Chung, as well as research analysts Choy Yoon-young, Kang Dong-hyun and Kim Min-seung.Peter Chung predicts that the total market capitalization of cryptocurrencies could soar to $5 trillion, more than three times greater than its current level of $1.6 trillion. He attributes this potential growth to three key factors: the possibility of the U.S. Federal Reserve easing its monetary policy, the potential approval of spot bitcoin and ether exchange-traded funds (ETFs), and the anticipated Bitcoin halving event expected in April 2024.Photo by Pierre Borthiry — Peiobty on UnsplashFactors driving crypto market growth in 2024Peter Chung suggests that the growth of the crypto market will be driven by the expanding utility of virtual assets. He believes that once ETFs for bitcoin and ether are approved, these cryptocurrencies will become more versatile as investment options. This, in turn, is expected to enhance their reputation and foster wider adoption, having a significant influence on the broader crypto ecosystem beyond the two most dominant cryptocurrencies.Real-world assets and financial firmsChoy anticipates that the U.S. Securities and Exchange Commission (SEC) will approve spot bitcoin and ether ETFs by the first half of next year. On a different note, Kang focuses on the importance of blockchain technology, particularly emphasizing real-world assets (RWAs) and roll-up solutions. Kang highlights that since RWAs are closely linked with traditional financial institutions, an influx of capital from these entities is likely to boost the RWA market. This interaction between traditional finance and blockchain technology could be a key driver of growth in the sector.Regulatory changes and landscape shiftKim Min-seung, another analyst from the team, forecasts that upcoming regulatory developments could alter the dynamics of the cryptocurrency market. A notable development in this regard is the forthcoming implementation of the Virtual Asset User Protection Act in South Korea, set for July next year. According to Kim, these changes might result in a scenario where only competitive cryptocurrencies survive.Kim elaborates that the perception of virtual assets is poised for a shift. Currently, crypto investors tend to base their decisions on expectations of arbitrary cryptocurrency inflation. However, once new regulations are implemented, investors are likely to start assessing the actual value of virtual assets more critically. This shift in approach could lead to a more value-driven and stable cryptocurrency market, as speculative tendencies might decrease and a focus on intrinsic value increases.According to local news outlet website The Asia Business Daily, Peter Chung anticipates further growth in the cryptocurrency market next year, following its rebound this year. He suggests that this growth trajectory will not only continue but also attract increased attention from the public.

Bakkt Holdings, a software as a service (SaaS) and API platform for owning and trading cryptocurrency, has unveiled its plans for an extensive expansion into Asia and other crypto-friendly international jurisdictions. Focus on Hong Kong and SingaporeAccording to a recent press release, Bakkt has broadened its footprint into two additional Asian markets, namely Hong Kong and Singapore. This strategic expansion aligns with the company's key objectives for 2024. Data from South Korean Web3 advisory and research firm Tiger Research suggests that Asia is poised to become the epicenter of the global crypto landscape within the next five years. In particular, Singapore and Hong Kong have emerged as dominant forces in the Asian crypto landscape. Their well-defined regulations, favorable tax structures and status as international financial hubs have attracted major players in the crypto industry. The announcement emphasizes Bakkt's commitment to making cryptocurrencies more accessible globally. The company envisions that crypto has the potential to enhance financial inclusivity and connect communities within the global economy. CEO Gavin Michael expressed excitement about the opportunities these regions present, highlighting the company's dedication to reaching millions of people through its crypto services.Photo by Jigar Panchal on UnsplashBroader global expansionBakkt's international expansion is not limited to Asia. Additionally, the company is targeting Latin America. Brazil, Argentina and Mexico lead the way in the adoption of crypto assets in Latin America. The digital assets solutions firm has successfully established crypto trading and on-ramp capabilities in Brazil and Guatemala, adding to its existing operations in Argentina and Mexico. Furthermore, Bakkt has plans to establish a presence in the United Kingdom and Australia in the coming months.   The decision to expand into these specific jurisdictions is influenced by the rapid growth of the crypto economy and the regulatory clarity observed in these regions. Despite global market fluctuations and recoveries, certain countries continue to welcome crypto-related businesses with robust regulatory frameworks. In collaboration with Bakkt Holdings, Hapi and SogoTrade have launched new crypto trading capabilities, expanding their offerings across Asia, Europe, North America and South America. Hapi, a stock trading platform, has extended its crypto trading services to Brazil, Guatemala and Spain, deepening its relationship with Bakkt. On the other hand, SogoTrade, a digital brokerage, has initiated crypto trading in Hong Kong and Singapore, marking the beginning of its foray into Asian markets. Bakkt, established in 2018, is focused on providing institutional-grade custody, trading and on-ramp capabilities. The company positions itself as a partner for sustainable, long-term crypto involvement. The firm was established with Intercontinental Exchange (ICE), the owners of the New York Stock Exchange, having a 66.7% controlling interest in the company.  Bakkt's strategic expansion into diverse international jurisdictions, including the Asian region, underscores its intention to enable global platform accessibility, together with its belief in the transformative power of cryptocurrencies within the financial landscape.