Delibit, the world’s largest cryptocurrency derivative exchange, is looking to expand in Hong Kong as market regulators are trying to turn cities into hubs for virtual assets.
The Dubai-based company is attracted to Hong Kong due to its status as an international financial hub and as a vibrant community of family offices and asset managers increasingly interested in cryptocurrencies. said Jean David Peckinau, the company’s top commercial director. It is based in the city.
“Hong Kong is this central financial hub of the world and a big hub in Asia,” he said. “If regulators can resolve the derivatives part, that’s where we love.”
Have questions about the biggest topics and trends in the world? Get the answers in SCMP Knowledge. It is a new platform for curated content using explanators, FAQs, analytics and infographics brought to you by an award-winning team.
On Wednesday, the Securities and Futures Commission (SFC) announced a new roadmap for its virtual asset ecosystem initiative. The plan includes introducing virtual asset derivative products for professional investors, or studying those with a portfolio of at least 8 million hk (US$1 million).
Jean David Pequinott, Chief Commercial Officer of Delivit. Photo: Handout = Jean David Pequinott, Chief Commercial Officer of Delivit. Photo: Handouts>
Crypto Derivatives Trading is something that Hong Kong regulators currently allow and lacks, focusing primarily on licensing, Pequignot said.
“Derivatives can be a speculative tool for those who want to bring leveraged bets to the market,” he said. “They can be at risk, but they are also very powerful instruments for hedging and risk management.”
Risk management factors could help investors navigate volatility in the volatile crypto market, Pequignot said.
Licensed in Dubai, Deribit offers a trading platform for Bitcoin and Ether Options. This derivative instrument gives traders the right to buy and sell assets at a given price at a certain time without immediately committing the underlying assets.
“Asia is a big market for derivatives and has sophisticated investors who are inherently speculative,” Pekenaud said. “We want to be in Asia. We need to work with regulators and find the right place and time to operate the regulatory framework.”
Another major financial hub in Asia, Singapore has yet to establish regulations on crypto-derived transactions.
The story continues