Hong Kong's aspirations in the cryptocurrency sector are making progress as 11 exchanges, such as Crypto.com and Bullish, have been labeled as 'licensed' by the Securities & Futures Commission (SFC). This development follows the introduction of a digital asset regulatory framework by the regulator, positioning Hong Kong as a prominent cryptocurrency hub.

Despite the absence of applications from major players like Binance, Coinbase, and Kraken, this milestone signifies a significant advancement in Hong Kong's crypto initiatives. The jurisdiction has set a deadline of June 1 for cryptocurrency exchanges to secure a license or face consideration as licensed entities.

As reported by Bloomberg, the exchanges deemed as 'licensed' can commence operations in the city and will be granted full licenses upon meeting the SFC's compliance requirements.

Hong Kong initiated its shift towards cryptocurrencies in late 2022, aiming to enhance its financial reputation following crackdowns on dissension. The city is competing with Dubai and Singapore to establish itself as a leading digital asset center.

Approximately two dozen companies submitted applications for operating crypto exchanges before the February 29 cutoff. Currently, Hong Kong is home to two fully licensed digital asset exchanges, HashKey Exchange, and OSL Group.

Hong Kong's approach prioritizes safeguarding investors and implementing anti-money laundering measures, potentially discouraging entities with stringent compliance needs. Nevertheless, the city presents an entry point to the wealth of mainland China, despite the crypto trading prohibition in the region.

The cryptocurrency industry's turbulent history, including incidents like the FTX collapse and Binance's penalties for money laundering violations, underscores the regulatory challenges that Hong Kong confronts in overseeing this dynamic sector. Furthermore, individuals can leverage virtual private networks (VPNs) or peer-to-peer transactions to circumvent regulations.