Deribit, the world’s largest cryptocurrency derivatives exchange, aims to expand in Hong Kong, a sign of momentum as the market regulator looks to make the city a hub for virtual assets.
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The Dubai-based company was drawn to Hong Kong because of its position as an international financial hub and its vibrant community of family offices and asset managers, which are increasingly interested in cryptocurrencies, said Jean-David Péquignot, the firm’s chief commercial officer, who is based in the city.
“Hong Kong is this central financial hub in the world and a big one in Asia,” he said. “If regulators can solve the derivatives piece, it is a place where we love to be.”
On Wednesday, the Securities and Futures Commission (SFC) unveiled a new road map of initiatives for the virtual-asset ecosystem. The plan includes studying the introduction of virtual asset derivative products for professional investors, or those with portfolios of at least HK$8 million (US$1 million).
Crypto derivatives trading was the missing piece of what Hong Kong regulators currently allow, which was predominantly focused on licensing, Péquignot said.
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“Derivatives can be speculative instruments for people who want to take leveraged bets into a market,” he said. “They can be risky, but they are also very powerful instruments for hedging and risk management.”