Huobi Global, one of the world’s biggest crypto-exchanges, is preparing to launch in Australia, and Adrian Harrison, chief of the local operation, says the forward-thinking regulatory landscape here puts the country at the forefront of the crypto-movement.
Domiciled in Singapore, Huobi provides exchange trading for cryptocurrencies, with 150 coin pairings available. According to Harrison, the exchange is “consistently in the top three in the world, in terms of volumes”.
In February, Huobi raised $US300 million ($406.7 million) through the launch of its own Huobi Token, which allows exchange users to benefit from discounts in fees.
It launches in Australia on July 5, and will start by listing Australian dollars against a range of cryptocurrencies, before building up its offerings over time and eventually offering coin-to-coin trading, too.
Although Harrison acknowledges that globally, the industry is at a bit of a low point — the price of Bitcoin has dropped by more than 50% since the start of the year — he stresses cryptocurrency is in very early days.
Having come from a capital markets and equity markets background, Harrison notes: “The market for cryptocurrency is far less mature than you would see in other more established secondary markets”.
It’s dominated by retail investors — albeit very knowledgeable and in many ways sophisticated investors — but not institutional. Once institutional investors get their hand in, “it [will] bring a different skill set and level of sophistication”, says Harrison.
“More than likely, it will reduce volatility,” he adds.
Harrison says Huobi is “anticipating an increase in demand”, and will be there to meet it.
Progressive and receptive regulators
According to Harrison, Australia is an important market in Huobi’s global expansion plans, partly because it’s a mature market in terms of financial services as a whole, with “a very receptive and progressive set of regulators”.
The exchange is regulated by the Australian Transaction Reports and Analysis Centre (AUSTRAC), the Australian Securities and Investments Commission and the Australian Taxation Office, all of which Harrison says are “on a global scale, considered to be very, very progressive and receptive”.
In fact, he says setting up in Australia was painless, and required the exchange to register with AUSTRAC as a digital currency exchange. There’s a “set of procedures around that,” Harrison says, but those have been completed.
“We’re registered and ready to go,” he says.
Australian regulators are willing to interact with the crypto and blockchain communities, and also with banks and lawyers who may not know how to manage crypto-assets, he says.
It becomes a “positive feedback loop”, he says. If the regulators are taking cryptocurrencies seriously, that will attract people from more traditional banking backgrounds to get involved and contribute to the discussions, allowing the regulators to relax a little, and ultimately attracting more investors.
“Once you get progressive regulations coming in it gives us a sense of legitimacy,” Harrison says. “We’re here to work with them.”
Huobi’s Australian operations will start out with 10 fiat pairings, allowing people to use Australian dollars to purchase some of the major global coins, plus some Australian cryptocurrencies.
Harrison intends to build relationships within the market, offering Australian investors access to Australian crypto projects.
“We will roll out coin-to-coin and fiat-to-coin pairings on a monthly basis, until we grow to a number of pairings that satisfies the Australian market,” he says.
“The aim is to be number one in this market.”