Cryptocurrency as an Alternative Financial Services
The failure of banking systems in landlocked and poverty-ridden countries in the African and Asian continent has left a large portion of unbanked locals in the region. One of the main challenges of these unbanked population is conducting financial transactions on a daily basis.
The lack of economic infrastructure and financial education have resulted the public not utilizing the common services available in financial institutions.
This phenomenon paved the way for emerging alternative financial services to be adopted as a means of payment. Moreover, the widespread use of smartphones has also enabled the use of digital currencies as a financial payment medium without the traditional roles of a bank.
Inspired by this, serial entrepreneurs Edward Lau and Stephen Yip, co-founded Hong Kong Cryptocurrency Exchange (HKCCEX) in 2017 to tackle some of the major issues in digital currencies or popularly known as cryptocurrency, with cybersecurity, regulation and education.
Bringing Cryptocurrency to the Mainstream Arena
Both of them were looking into different ways of creating value in this new field when they started delving into the cryptocurrency business in 2013. While there were profits to be made in trading and mining, they were not necessarily the end goals for either of the co-founders.
Lau firmly believes in the Pareto principle, which states that 80 percent of the effects come from 20 percent of the causes. In the cryptocurrency sphere, only 1 out of 5 people proactively understand cryptocurrency. On top of that, only 20 percent of those who understand cryptocurrency, hold, use, and trade them regularly.
In order to make it widely adaptable, they knew that it was necessary to take a retail-focused approach for anyone who deals with cryptocurrency. Instead of restricting the market audience where only the technically proficient can access new cryptocurrency solutions, they aim to provide a far more familiar experience, which is comparable to using fiat money in conventional stock investment.
Going Public and Forming Global Partnerships
In addressing the issues of many unregulated cryptocurrency exchanges, the co-founders knew they had to distance themselves away from the negative public perception against the cryptocurrency environment.
To combat this, the co-founders carried out a reverse takeover of a US OTC Market listed company, called Living 3D Holdings Inc. The co-founders then injected HKCCEX into the company which enables HKCCEX to be governed by the US Securities and Exchange Commision (US SEC).
Being under the governance of US SEC, HKCCEX would be able to give investors the confidence to invest in this business. By becoming a publically-listed entity, HKCCEX is able to securitise their product, raise funds and conduct margin lending license.
As a B2B platform, forming great partnerships and licensees in the region provide the biggest leverage for HKCCEX. By working closely with local partners and their clients, they are able to establish market presence in the local investment communities.
Consequently, HKCCEX’s programmes are tailored specifically to the taste of each and every region, enabling them to take this opportunity to gain an understanding of how do the locals invest, keeping in mind that each jurisdiction has its slight nuances.
The co-founders believe that finding key strategic partners to work with is the best marketing strategy. Relying the programmes on their partners, working closely with them and providing support to help licensees are some of the key success factors of HKCCEX.
Making Cryptocurrency Widely Adoptable
What stood out about HKCCEX among other exchange boards are the digital currencies selected by the team. For all the coins that are listed on HKCCEX, they underwent a qualifying process in which strict criteria has to be met. Coins traded on HKCCEX are primarily coins which have solid underlying value proposition such as coins used for utility, global remittance, or privacy-oriented coins (like DashCoin).
Furthermore, the products and their underlying value proposition have been studied thoroughly by the HKCCEX team before it being safely introduced to the investors. The thorough study ensured that these coins are sustainable for a long time, despite the volatility nature when a coin is newly listed. The objective of the HKCCEX team is to eliminate common concerns of cryptocurrency trading.
The current cryptocurrency market has a gap that creates big hurdles for a wider audience to comfortably invest in cryptocurrency. HKCCEX wants to form a cryptocurrency exchange that offers a comprehensive package to the cryptocurrency market with constant education and awareness, excellent customer support, and solid security technology, which are lacking in the existing traditional exchanges.
By providing a retail-based solution to generate more interests, they remove the fear factor and demystify the process of investing in cryptocurrency. Lau mentioned, “With HKCCEX, they (retail investors) don’t need to take a quantum leap of faith to actually invest in cryptocurrency. They are putting in fiat money and they will be drawing back fiat money just like stock investment.”
The Future of Hong Kong Cryptocurrency Exchange
In addition, the co-founders emphasize on customer loyalty, in which their competitors don’t, making HKCCEX superior in the industry. In the near future, the co-founders envision the business to expand services into offering Initial Coin Offering (ICO), wallets, cryptocurrency ATMs and payment gateways as part of their business development plan to capitalize on the new market.
Instead of focusing on getting to the top, HKCCEX competes by market volume. Running a licensing regime gives them the leverage in the market. As long as they achieve between 20 and 30 licensees, a milestone has been reached in sustaining and generating revenue from this business.