Hong Kong Reportedly Pushing Top Banks to Support Crypto Firms

Hong Kong Reportedly Pushing Top Banks to Support Crypto Firms

Hong Kong’s central bank is reportedly pushing HSBC,
Standard Chartered, and the Bank of China, to accept cryptocurrency companies
as clients, the Financial Times reported today (Thursday), citing three people familiar with the matter.

The Hong Kong Monetary
Authority (HKMA) has questioned the lenders why they were not
opening bank accounts for companies dealing in cryptocurrencies. The latest
development reflects what HKMA said in a circular released in April that banks
should support crypto firms.

Hong Kong Eyes Crypto Adoption

In an effort to make
Hong Kong a digital asset hub, HKMA legalized cryptocurrencies for retail
clients. In June, the country’s Securities and Futures Commission (SFC) started
accepting applications for cryptocurrency trading. The regulators, however,
ruled out stablecoins, cryptocurrency derivatives, and crypto-staking products.

Furthermore, HKMA
encouraged banks not to shy away from onboarding crypto business, adding that
there was resistance from the conventional banking mindset, the sources
familiar with the matter told FT. HSBC, Standard Chartered, and the Bank of
China are among the largest lenders in Hong Kong.

Hong Kong’s positive
approach to digital assets comes at a time when cryptocurrency exchanges are
struggling to get banking services due to a crackdown in the sector.
For instance, in Australia, Binance was forced to halt Australian
dollar deposits and withdrawals due
to challenges with a payments service provider.

Crypto Firms Struggle Getting Banking Services

The challenges were
aggravated by the lawsuits brought by the Securities and Exchange Commission
(SEC) against Binance and Coinbase for allegedly flouting the regulations. Amid
pressure on crypto exchanges, banks are moving away from the sector so that they do not breach
regulations. However, Hong Kong is moving in the opposite direction.

Cryptocurrency exchange Coinbase received
an invite from one of
Hong Kong’s legislators to set up operations in the country, Finance Magnates reported recently. Johnny Ng
Kit-Chong, a member of the Legislative Council in Hong Kong, said he was willing
to support the exchange in the region.

Headquartered
and listed in the US, Coinbase has hinted at moving outside the country. The
exchange quite recently added
a license from Bermuda that
allows it to offer cryptocurrency services like token sale and issuance.
Afterwards, the company launched a crypto derivatives exchange on the offshore
island.

This article was written by Jared Kirui at www.financemagnates.com.

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