Good morning from Hong Kong, where I will be talking to some of Asia’s leading finance and crypto executives at the Fortune Innovation Forum. I’ve long been curious about this famous city due to its history as a crossroads of global trade, and the geographic and cultural connections it has to another Pacific Rim city—my hometown of Vancouver. Fortunately, I had some time to explore before the conference kicked off, which let me go for a hike on one of Hong Kong’s dramatic mountain peaks, eat dim sum, and, of course, check out the local crypto scene.
I’ve long heard about stores and stalls in Asia where it’s possible to walk in and buy a variety of cryptocurrencies. This is very different from the U.S. where, at best, you might find a Bitcoin ATM in a random cafe. I’d read that Hong Kong is in a curious juncture at the point when it comes to crypto—the city is cracking down on crypto vendors, while at the same time passing pro-crypto regulation to compete with Singapore and the UAE as a hub for the emerging industry.
This was reflected in my own experience when I set out to buy crypto in Hong Kong. I found that stores that existed not long ago with names like “Satoshi Bitcoins” were marked as permanently closed, but that a handful still remained. I set out for a mall that showed “HK Crypto” still open for business, and found the store and another one nearby called “Digi-Castle.” I chose HK Crypto, which displayed a wide array of cryptocurrency logos, and went in.
For disclosure, I don’t actively trade crypto in order to avoid conflicts of interest, but I do own half a Bitcoin I purchased years ago and also small amounts of other cryptocurrencies that I use to try out various new blockchain services. At the Hong Kong store, I stood in a short queue behind Cantonese-speaking customers whom I overhead engaging in transactions involving the Ethereum-tied Algorand and the stablecoin USDC. When it was my turn, I approached the window and saw a humming cash machine as well as large printed QR codes for those wishing to sell crypto for cash.
I asked to buy 200 HKD (about $25) to buy some Bitcoin but was told the minimum transaction was 500 HKD. I decided to sell some instead and called up a QR code tied to a wallet on my phone, but then I was informed I would have to show my passport or another form of ID, which I had left at the hotel. I explained the situation but was politely told they could not do the transaction due to KYC (know-your-customer) laws. So much for crypto being totally lawless!
The situation did illustrate nicely how far crypto has evolved from the early days when most people bought it via sketchy offshore exchanges or, in some cases, from strangers on the street. My experience at the HK Crypto shop felt more like using an airport currency exchange—one with an extra layer of regulation—than an outlaw venture. This shows that, even as the U.S. government tries to drive crypto from its shore, other regions are creating regulatory regimes to bring it into the mainstream.
A final note to this story: I returned to my hotel via Hong Kong’s famous harbor-crossing Star Ferry, but only after I discovered I would have to use cash and not a credit card to purchase the ticket. It turns out that, even in some of the busiest and most tech-savvy places in the world, there are corners where cash is still king.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
This story was originally featured on Fortune.com