Chinese Banks Support Hong Kong Crypto Firms
Chinese state-owned banks are offering banking services to local cryptocurrency companies in Hong Kong, indicating that the recent move by Hong Kong to embrace a more friendly regulatory stance on cryptocurrencies has the backing of Beijing.
The Hong Kong arms of some Chinese banks, including Bank of Communications, Bank of China, and Shanghai Pudong Development Bank, have either started offering banking services to local crypto firms or have made inquiries.
This is a surprising source of potential support for crypto firms that have been struggling to find banking services due to the anonymous nature of cryptocurrencies, which has been a major red flag for traditional banks.
Hong Kong’s push to become a major digital asset center has attracted more than 80 virtual asset-related firms that have shown interest in establishing a presence in the city since October 2022.
The surge in interest came after the Hong Kong government released its policy statement on Virtual Asset Development, clarifying its stance on virtual assets.
However, banking for crypto businesses has never been easy, and digital asset firms have been forced to find various workarounds to meet operational banking needs.
To cash out tokens, some have turned to over-the-counter crypto exchanges such as OSL and Hashkey, the only two licensed in Hong Kong, or used physical crypto money exchanger counters in the city.
The move by Chinese state-owned banks to offer banking services to local crypto firms in Hong Kong is a positive development for the crypto industry in the city.
It would be great if local banks could start some trial program to support crypto firms and more professional service providers that understand the native environment.
What is the reason for the Chinese banks’ support for Hong Kong crypto firms
The reason for Chinese banks’ support for Hong Kong crypto firms is due to the city’s more friendly regulatory stance towards cryptocurrencies.
Hong Kong has made its intention to become a well-known crypto hub, with new rules accommodating the market. The Hong Kong government released its policy statement on Virtual Asset Development in October 2022, clarifying its stance on virtual assets, which has led to a surge in interest from crypto firms.
According to a recent report from Bloomberg, the Hong Kong arms of some Chinese banks, including Bank of Communications, Bank of China, and Shanghai Pudong Development Bank, have either started offering banking services to local crypto firms or have made inquiries.
What are the benefits for Chinese banks to support Hong Kong crypto firms
Chinese state-owned banks are offering banking services to local cryptocurrency companies in Hong Kong. This move signals a potential shift in China’s stance towards cryptocurrencies, despite the country’s strict prohibition of crypto assets.
The Hong Kong arms of some Chinese banks, including Bank of Communications, Bank of China, and Shanghai Pudong Development Bank, have either started offering banking services to local crypto firms or have made inquiries.
This support from Chinese banks is significant for crypto firms in Hong Kong, as it provides them with much-needed support amid the recent regulatory actions in the US.
Hong Kong has recently become a more crypto-friendly destination, with new rules accommodating the market. Hong Kong’s Secretary for Financial Services and Treasury revealed that more than 80 crypto firms wished to set up shop in the region.
The surge in interest came after the Hong Kong government released its policy statement on Virtual Asset Development in October 2022, clarifying its stance on virtual assets. Despite China’s ban on crypto trading, it seeks to make Hong Kong the crypto hub of Asia.
The recent banking crisis and regulatory action in the US have forced banks to cut down on servicing crypto firms, making it an opportune time for Hong Kong to attract more crypto firms looking for crypto-friendly destinations.
