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Regulations are often seen as a barrier to crypto innovation. However, Hong Kong has taken a different path in its quest for hegemony in the crypto derivatives market. Taking inspiration from European standards while shaping them to its advantage, the city is trying to redefine the rules of the game With a stated ambition to become a global hub for OTC (over-the-counter) crypto derivatives, Hong Kong seems ready. to reverse the European models and use them. But is this strategy a mere alignment or a rebirth of existing rules?
The European model reinterpreted for cryptocurrency supremacy
Derivatives regulation is a complex area, especially for digital assets. Europe has long been a pioneer in the regulation of financial derivatives.
Hong Kong, although often seen as a bold territory, seems to want to take advantage of this European expertise this time around. But make no mistake, this is no simple copycat.
By adopting international standards such as Unique Transaction Identifiers (UTI) and Unique Product Identifiers (UPI), Hong Kong is doing much more than just complying with international requirements.
The city ensures global recognition while flexibly adapting the rules. Regulation, which is far from a limitation, becomes a strategic lever to attract market participants.
The bold is the introduction of Digital Token Identifiers (DTI), directly inspired by European designs but adapted to the Asian ecosystem.
Hong Kong doesn’t just adopt the rules: it tweaks them, modifies them, and sometimes reinvents them to better fit its vision of the crypto market.
Battle of the regulators: Hong Kong enters the arena
If Europe has paved the way for strict regulation, Hong Kong seems poised to go further. By adopting the ISO 20022 standard for financial reporting of OTC derivatives, Hong Kong is not only striving for harmonization, but aiming to become the gold standard in Asia.
Widely supported by industry stakeholders, this standard promises greater alignment with global reporting practices, thereby facilitating cross-border trade.
But it’s not just a technical question. Behind this move, Hong Kong positions its regulators as the true arbiters of the global market.
By simplifying the mandatory data fields, the city is expressing its desire to make reporting accessible while maintaining operational complexity comparable to the United States and Europe.
This trade-off between efficiency and compliance is not the result of chance, but a deliberate strategy to gain ground against other major financial centers.
The ultimate goal is clear: Hong Kong does not want to be just a follower of European models, but to become a key player in the regulation of crypto-derivatives. By shaping the rules of the game in its favor, the city hopes to attract a new wave of investors ready to operate in a safe but flexible framework.
Hong Kong, the future epicenter of crypto-derivatives?
While European regulation has often been criticized for its complexity, Hong Kong is trying to simplify its application while maintaining its credibility.
The new rules planned for 2025, with the introduction of unique transaction and product identifiers, demonstrate a desire for standardization but also for differentiation.
Hong Kong is not just copying: it is exploiting loopholes, maximizing opportunities and establishing itself as a leading regulatory player.
The choice of strict but flexible regulations should not be seen as simple compliance with international standards. Hong Kong adopts, tweaks and sometimes twists these rules to suit its own ambitions.
By leveraging European credibility, the city creates its own regulatory identity at the crossroads of innovation and conformity. In addition, the dollar and the yuan are collapsing.
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Fascinated by Bitcoin since 2017, Evariste continued to research the topic. If his first interest was trading, now he is actively trying to understand all the developments focused on cryptocurrencies. As an editor, he strives to consistently deliver high-quality work that reflects the state of the industry as a whole.
DISCLAIMER OF LIABILITY
The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.