Hong Kong sees an 85.6% growth in crypto transaction value year-over-year, marking the highest growth in East Asia, according to the recent Global Cryptocurrency Adoption Index released by Chainalysis.

The Chainalysis report, released last week, attributes this increase to Hong Kong’s proactive regulatory framework, which has encouraged greater institutional adoption of cryptocurrencies.

Recent regulatory developments, especially the implementation of a licensing requirement for cryptocurrency exchanges in June 2023, aim to attract more participants to the virtual asset market.

Additionally, the city has launched exchange-traded funds that invest in cryptocurrency tokens and is currently developing regulations concerning stablecoins.

Consequently, Hong Kong has emerged as the second-largest cryptocurrency market in East Asia, following South Korea, with mainland China ranking fifth.

In contrast, mainland China’s cryptocurrency activities have declined due to stringent government policies against digital currencies.