Stock exchanges in Asia are intensifying their scrutiny of companies seeking to accumulate bitcoin (BTC) in their treasuries, making it difficult for them to access public markets.
According to a Bloomberg investigation, regulators in major financial centers such as Hong Kong are applying strict regulations that limit companies with a high percentage of liquid assets, a category in which bitcoin is often classified.
The most notable case is that of the Hong Kong Stock Exchange, which this year has called into question the plans of at least five companies that were trying to pivot towards a treasury strategy with bitcoin and other digital assets.
The regulators’ main objection is that these firms could be classified as “cash companies” by holding an excessive percentage of liquid assets in their portfolios, which contravenes local stock exchange regulations designed to prevent the listing of shell companies.
This trend is not limited to Hong Kong. Stock exchanges in Australia and India have shown similar resistance, arguing that the digital currency’s accumulation model does not fit the rules for operating companies.
Although Japan has been an exception, allowing companies like Metaplanet to accumulate large amounts of bitcoin, signs of friction are already emerging.
Analysts point out that even in that market, global index providers such as MSCI have proposed excluding these firms from their measurements, which could limit their attractiveness to institutional investors.
This increasing regulatory scrutiny could slow the adoption of the bitcoin corporate treasury model in the region.
In the following graph, provided by BitcoinTreasuries, it is seen that there are more than 100 companies that accumulate BTC in their treasuries. Between them they own more than 1 million bitcoin.
Some of these companies—for example, Argentina’s Mercado Libre—hold bitcoin as a reserve asset while continuing their usual activities. Others, such as Strategy, have made the accumulation of bitcoin their main business model.