According to reports, stock exchanges in Australia, Hong Kong, and India have started to prohibit or limit businesses from acting as Digital Asset Treasury (DAT) vehicles.
According to a Bloomberg story that cited unidentified sources, Hong Kong Exchanges & Clearing Ltd. has turned down at least five businesses looking to become DATs, citing regulations prohibiting “cash companies” that retain largely liquid assets.
Take back at crypto
A company’s listing application was denied by the Bombay Stock Exchange last month after it revealed plans to invest its profits in cryptocurrency.
DAT models are “essentially impossible” since Australia’s ASX prohibits businesses from storing more than 50% of their balance sheets in cash-like assets like cryptocurrency.
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According to a spokeswoman, ASX-listed companies that decide to engage in cryptocurrency “are encouraged to consider structuring their offering as an exchange-traded fund.”
Japan and USA take a different road for DATs
The idea is still welcome on Japanese stock markets. With 14 listed Bitcoin purchasers, including Metaplanet, the fourth-largest Bitcoin DAT globally, Japan is the country with the highest number of DATs in Asia and permits them with appropriate transparency.
Even in the USA, DATs are very much in action and ever since Trump took the office, digital asset treasuries have skyrocketed in the country.
One classic and pioneering example is Strategy (NASDAQ: MSTR) whose stock price has increased by 1,538.14% in the past 5 years to a market cap of $86.68 billion. Strategy now holds 640,418 $BTC, making it the largest listed company in the world holding Bitcoin.
Where is the problem with DATs?
According to Bloomberg, several stock exchanges have voiced concerns about these companies selling their “listed status” instead of conducting lawful, operational enterprises.
Additionally, there is the “cash company” problem, where businesses that contain mostly liquid assets may appear to be empty shells that might be misused.
According to the statement, regulators also want listed firms to be active businesses rather than merely asset-holding investment vehicles. So the above-mentioned asian countries might be putting a stop to DATs because of these problems.
Vitalik Buterin, a co-founder of Ethereum, stated that while he is in favor of publicly traded firms that own Ether, he cautioned that if the trend gets too leveraged, it might be dangerous.
According to Buterin, more corporate ownership attracts additional investors to ETH. He added that careful management of the practice is necessary to avoid a chain reaction of forced sales that might devalue the token.
Hong Kong moves ahead with Solana ETF
On the other hand, after Bitcoin and Ethereum, the first Solana (SOL) spot ETF has been authorised by the Hong Kong Securities and Futures Commission (SFC), making it the third cryptocurrency to be approved for a spot ETF. This is the first SOL spot ETF to be launched on a US market in addition to being the first in Asia.
Brokerage information indicates that the Hua Xia Solana ETF is anticipated to go live on October 27. The minimum investment amount is around $100, and each trading unit is 100.
What does this mean?
The different approach towards cryptocurrencies by different countries shows how and in what way the future of cryptocurrency will shape in that country. For now, how these pullbacks turn out is yet to be seen.
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