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.