Hong Kong Receiving Softening Stance on Crypto
Chinese Coins Narrative Overview & BUSD Post Mortem

Theo Delarosa
February 21, 2023
🗓 Daily Bullets - Tuesday, February 21st
Today’s newsletter is 1062 words. A cool 5 minute read.
Like running into a brick wall - Bitcoin is having trouble moving past $25k and ETH past $1700. In the meantime, narrative rotations have recently switched to a focus on Chinese coins with interesting developments happening with China’s stance to Hong Kong’s crypto ambitions.
Today we’re looking at:
- 🇭🇰 Hong Kong Receiving Softening Stance on Crypto
- 🇨🇳 Chinese Coins Narrative Overview
- 💲BUSD Post Mortem
🇭🇰 Hong Kong Receiving Softening Stance on Crypto

Backstory: Is China finally coming around on crypto? Not quite but Beijing officials are reportedly showing subtle support for Hong Kong's ambitions of becoming a crypto hub. Hong Kong is a Special Administrative Region of China, allowing it to have its own laws and governance.
Key Details:
- In October 2022, Hong Kong proposed a bill to regulate crypto and allow retail investors to directly invest in virtual assets, in contrast to China's widespread crypto ban
- Representatives from the China Liaison Office have reportedly been attending Hong Kong crypto gatherings
- Hong Kong's Securities and Futures Commission recently outlined a new crypto license regime, proposing that all centralized exchanges operating in the region must be licensed with the regulator
- The proposed regime also suggests allowing retail traders access to licensed crypto trading platforms
- Huobi Global announced plans to seek a local license and open a new Hong Kong-only exchange with a focus on institutional and high-net-worth individuals
Key Takeaway: Nick Chan, a National People’s Congress member and lawyer stated, “As long as one doesn’t violate the bottom-line, to not threaten financial stability in China, Hong Kong is free to explore its own pursuit under ‘One Country, Two Systems’”
From a government and influence standpoint, it’s not great to let others drive innovation while you sit back and fall behind..
Context:
New Bitcoin narrative brewing: Hong Kong is getting into crypto.
What makes it even more interesting is the People's Bank of China is one of the only central banks in the world cutting rates & easing.
Asia is bidding [sources]
— Luke Martin (@VentureCoinist)
Feb 16, 2023
🇨🇳 Chinese Coins Narrative Overview

What’s Happening? Narrative rotations happen fast. Just this year we’ve seen LSD, Metaverse, AI, ZK and now everyone on CT is pumping coins with any small relation to China.
Is there any substance? One aspect that stands out is that Hong Kong is reportedly planning to lift a ban on retail crypto trading. It’s important to note that this would only apply to certain large caps and not a complete acceptance of crypto, especially in mainland China.
Whilst CT is pumping & dumping 💩coins with any miniscule resemblance to China 🇨🇳
If you actually look what is proposed in Hong Kong (note it's just a proposal at this stage) retail investors would be restricted to "Eligible Large cap assets which are included in 2 indexes"
— Seq (@CryptoSeq)
Feb 21, 2023
Which coins are included in the rotation and what their connection is to China? Check out the list:
"Chinese coin" narrative is in FULL FORCE
All you need to know about these 8 coins before aping:
• TLDR on the project
• Current/potential narrative
• Token stats & where to buy早上好中国,我们上车!一起上月亮 🌕!
— j (@JavierAng_)
Feb 20, 2023
Analysis: As opposed to other narratives which are able to sell a promise or idea of the future, simply saying any coins associated with a certain country will pump feels a bit forced. That however hasn’t stopped Chinese coins from outperforming over the past week.
Go Deeper: 1st
💲BUSD Post Mortem

Backstory: Issuer Paxos received a Wells notice from the SEC on Feb. 12 that BUSD is a security that should have been registered before being sold to US investors. The firm paused all new token issuances and cut ties with Binance, leaving the stablecoin in limbo.
New Developments:
- BUSD has shed more than 20% of its market cap - currently $41.46B
- BUSD is now worth less than Cardano's ADA and is competing with MATIC for the eighth spot on the market cap leaderboard
- BUSD is still the third-largest stablecoin by market value, behind USDT and USDC
What’s next? Stablecoins are the lifeblood of crypto and have long been the target of FUD and speculation. Which stablecoin will eventually reign supreme? Fiat-collateralized, crypto-backed, algorithmic?
In the aftermath of the Terra collapse and with regulation ramping up, it’s important for investors to be mindful of where they park their crypto. BUSD for a decent part of 2022 seemed like a healthy candidate as Binance came out of the FTX collapse stronger. As it currently stands, USDT accounts for approximately 51% of all stables and USDC 30%. BUSD is 9.35% and can be expected to continue falling.

Go Deeper: here
✅ Daily Bullets
- Polygon Labs cuts 20% of workforce, almost 100 jobs
- Blur is teasing its next “Season 2” token airdrop
- Paxos in constructive discussions with the SEC and ends relationship with Binance
- A developer has adapted the Ordinals project for rival proof-of-work blockchain Litecoin
- DraftKings will launch an NFT fantasy golf game in partnership with the PGA Tour
- Deutsche Bank and Memento Blockchain successfully completed a proof of concept – known as Project DAMA
- Bosch and Fetch.ai new partnership to form Fetch.ai Foundation
- Microsoft partnered with Ankr to provide a novel node hosting service on the Microsoft Azure Marketplace
- Arbitrum-based algorithmic stablecoin project Hope Finance exploited for $2M
- Chiliz integrated with Injective
- Moonbird’s “Proof of Conference” canceled, citing less interest than anticipated
- Composable Finance CTO exits citing unethical management and lack of financial transparency
📊 Market Dashboard
- 📈 Gainers:

- ANKR - Decentralized Infrastructure
- BONE - Shibaswap Governance Token
- 1INCH - DEX Aggregator
- 📉 Losers:

- BLUR - NFT Marketplace
- IOST - Blockchain Network
- METIS - Optimistic Rollup
Charts of the Day - Chinese Coins Check-in

- It’s been a pretty solid week for Chinese coins led by Conflux on the back of many partnerships and positive developments. Rotations come and go quickly.
📚Research/Reads
- The space over the next 6 months and how creators, traders and investors will be affected | On Royalties, And Moving Forward - source
- Potential for miners to shift their compute resources to AI | Cryptocurrency miners are leading the next stage of AI - source
- The future is multichain | Navigating the Web of Interoperability: A deep dive into Arbitrary Message Passing Protocols - source
- Why You’re Probably Wrong About Blockchain "Profitability" | ETH Is Not Ultrasound Money: Part 1 - source
- Is it a Sequencer? An executor? What problems arise? | Where Is the One Honest Party for a Rollup? - source
- What anti-phishing browser plugins are available on the market? | NFT phishing sites on the rise: an inventory of "anti-phishing plug-ins" on the rise - source
- Infrastructure projects and regulatory-resistant protocols have attracted cautious investors | What Are VCs Funding After FTX? More Decentralized Infrastructure - source
- Cybersecurity attack targeting employees | Social Engineering - A Coinbase Case Study - source
🎁 Bonus - Arbitrum Ecosystem Guide
Arbitrum, Arbitrum, Arbitrum - you’ve heard about it, ya? Pretty in season right now. Here’s a highlight on 13 projects to keep an eye on:
Arbitrum Ecosystem Guide 🔎
I've been researching 100+ Arbitrum protocols over the past weeks.
Here are the roadmaps of 13 projects you should keep a close eye on👇
— Thor⚡️Hartvigsen (@ThorHartvigsen)
Feb 20, 2023