The new development aligns with the country’s ambition to become a prominent global hub for crypto.
In a bold move aimed at embracing the crypto revolution in Hong Kong, the country’s banking regulator has reportedly exerted significant pressure on major financial services companies, including HSBC and Standard Chartered Bank, to accept crypto exchanges as clients.
According to a Financial Times report on Thursday citing three people familiar with the matter, the Hong Kong Monetary Authority (HKMA) questioned these banks, including the Bank of China, about their refusal to accept crypto exchanges as clients in May.
Notably, the central bank regulator had already taken a proactive stance on the matter just weeks before last month’s meeting.
In a letter dated April 27, the HKMA urged financial institutions to pay close attention to new market developments and adopt an ambitious strategy toward emerging sectors like the crypto market. The letter explicitly mandated the banks to facilitate the growth of virtual asset service providers (VASPs) and other crypto companies by ensuring they have access to essential banking services.
The regulator assured the banks that conducting due diligence on prospective customers should not impose excessive burdens, especially for entities establishing offices in Hong Kong with the intention of exploring opportunities in the region.
“Due diligence on potential customers should not “create an undue burden,” particularly “for those setting up an office in Hong Kong to look for the opportunities here,” the letter reads.
Hong Kong Urges Bank Not to Be Afraid
Hong Kong’s central bank regulator also encouraged the banks not to be afraid of servicing VASPs.
Sources familiar with the details of the meeting, held in May, revealed that the HKMA advised the banks not to succumb to fear, highlighting strong opposition from senior executives within the traditional banking system who remain skeptical about serving crypto firms.
This skepticism from decision-makers poses a significant challenge to the country’s vision of fostering a more inclusive environment for crypto clients within the banking sector.
Hong Kong Moves to Become Global Hub for Crypto
The new development aligns with the country’s ambition to become a prominent global hub for crypto. The Securities and Futures Commission (SFC) of Hong Kong initiated a significant move by opening its doors to applications for licenses from crypto trading platforms on June 1 in order to service retail customers in the region.
This progressive step indicates the country’s determination to foster a conducive environment for crypto-related businesses.
Adding to its crypto-friendly reputation, a Hong Kong lawmaker extended an invitation to Coinbase, the largest crypto exchange in America, urging the company to register its operations in the region.
By attracting prominent players in the crypto space, Hong Kong aims to solidify its position as a key destination for crypto businesses.
While many companies are already seeking applications to register with the appropriate authorities to offer their product offerings to customers across the nation, the Hong Kong government has warned crypto firms not to expect special treatment from authorities.
According to a Coinspeaker report on May 9, the HKMA chief Eddie Yue Wai-man told Bloomberg in an interview that the country will impose stringent regulations on crypto.
Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
