Stock exchanges in parts of Asia are becoming more cautious about allowing companies to focus on cryptocurrency holdings.
According to a report from Bloomberg, exchanges in India, Hong Kong, and Australia have reinforced policies that make it harder for firms to act mainly as digital asset holders.
In Hong Kong, the main stock exchange operator, Hong Kong Exchanges & Clearing Ltd., has turned down several companies that aimed to hold most of their assets in crypto.
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According to Bloomberg, these decisions are based on existing rules that prevent firms from operating as so-called “cash companies”, those that hold mainly liquid or tradeable assets without running a core business.
India’s approach is similar. The Bombay Stock Exchange recently denied a company’s attempt to go public after it said it would use the funds raised for crypto investments.
Australia’s main exchange, ASX, also has restrictions in place. It does not allow listed companies to keep more than half of their total assets in cash-like holdings, including digital currencies.
Due to this rule, the standard crypto treasury model is ineffective. Instead, companies interested in digital assets are advised to consider setting up an exchange-traded fund (ETF), which is a separate investment structure.
Recently, investors have adopted a more cautious approach when evaluating companies that hold Bitcoin
