In a move that reflects Hong Kong’s ambitions to become a leading global cryptocurrency hub, the Hong Kong Monetary Authority (HKMA) has reportedly exerted pressure on major banks, including HSBC, Standard Chartered, and Bank of China, to open their doors to crypto exchanges.
The Financial Times reports that during a meeting in May, the HKMA questioned these prominent financial institutions about their reluctance to serve as clients for cryptocurrency exchanges.
The HKMA’s stance aligns with its circular issued on April 27, which called on banking institutions to pay attention to market developments and adopt a more progressive approach toward emerging sectors such as cryptocurrencies. Specifically, the central bank required these institutions to assist “virtual asset service providers” in gaining access to banking services.
While the HKMA encouraged banks to embrace this opportunity, it also acknowledged the resistance from senior executives with a conventional banking mindset. Some traditional banks are hesitant to engage with the crypto industry due to concerns about potential legal challenges and scams.
Hong Kong’s push for greater acceptance of crypto firms comes at a time of regulatory turbulence for exchanges in the United States. Both Binance and Coinbase, two of the world’s largest cryptocurrency exchanges, have faced lawsuits from the U.S. Securities and Exchange Commission (SEC) for alleged violations of securities laws.
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In contrast to the apprehension displayed by traditional banks, some lawmakers in Hong Kong have shown support for crypto firms. Legislative Council member Johnny Ng recently expressed his backing for Coinbase on social media, even inviting the embattled exchange to establish operations in the region.
Hong Kong’s proactive stance on crypto regulation is also evident in the enactment of new rules on June 1. These regulations allow locally-licensed crypto firms to commence operations and provide services to retail investors, facilitating cryptocurrency trading in the region.
As banks and payment settlers worldwide grapple with their relationship with the crypto industry, Hong Kong’s efforts to encourage major banks to accept crypto exchanges as clients signal a determination to embrace the evolving financial landscape. The HKMA’s push for greater cooperation aims to position Hong Kong as a prominent global hub for cryptocurrencies, where innovation and regulation can coexist harmoniously.
