According to an OKX exec, the exchange is in the final stage and has banks waiting on regulatory approval in the form of a license.
Popular OKX crypto exchange is close to getting a virtual asset provider license (VASP) in Hong Kong and is in the final stage of the process. If all goes well, OKX should receive final approval for the license sometime in March 2024.
OKX is currently engaging with banks and financial institutions that are waiting to kick off operations with the crypto exchange as soon as it receives the VASP license. OKX global chief commercial officer Li Zhikai made this known in a recent interview.
Zhikai explained that banks have been wary of the cryptocurrency industry for a long time until last year when the government of Hong Kong began to throw its weight behind digital assets. The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority had asked banks to prepare to pay more attention to the crypto industry. Interestingly, Zhikai does not believe that there will be many approved licenses issued next year.
HashKey Received a VASP License Last Month
Last month, crypto exchange and trading platform HashKey became the first company to obtain a license in Hong Kong as a retail crypto service provider under Hong Kong’s new regulatory rules. Before then, HashKey had Type 1 and Type 7 licenses, which allowed the firm to deal in securities and also provide automated trading services. However, the new license allows HashKey to widen its customers to retail users. These developments put Hong Kong on a trajectory different from China’s stance largely against most crypto assets.
As of February 2023, over 80 companies, including Chinese and foreign companies, have expressed interest in setting up shop in Hong Kong. This follows Hong Kong’s welcoming outlook on cryptocurrency trading. However, only a few, including OSL and HashKey, are licensed to provide retail services. HashKey began crypto services on August 28 and will only offer Bitcoin (BTC) and Ether (ETH). The Hong Kong SFC has only approved BTC and ETH to reduce the potential risks of trading digital assets.
OKX to Enter India
In a recent interview, OKX’s Chief Marketing Officer Haider Rafique said the company is looking into the Indian market. OKX wants to expand into India despite the regulatory stiffness in the country. However, Rafique said OKX is willing to learn about the community in India and “work with local folks”.
Last year, India announced a 30% tax on all crypto gains in the country and a 1% tax deducted at source (TDS) on all crypto transactions. Following the rule, Indian think-tank Esya reported that up to $3.8 billion worth of crypto trading volume moved to foreign exchanges from domestic firms. Esya also reported that local crypto exchanges like WazirX, CoinDCX, and CoinSwitch saw an 81% crash in local trading volume between July and October. In addition, the volume of related keyword searches and app downloads have also tanked, showing that Indians have become a lot less interested in crypto. An Indian association for Web3 companies, Bharat Web3 Association, believes that reducing the TDS to 0.1% or 0.01% could solve the problem.