China State-Owned Banks Commence Offering Services To Local Crypto Firms In Hong Kong
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The Chinese state-owned banks offer services to local crypto firms in Hong Kong as the city embraces a crypto-friendly regulatory stance.
- What- The Hong Kong crypto firms seeing interest from the China state-owned banks
- Why- The city aims to bring many crypto firms onshore, especially those facing difficult times carrying out their operations in China.
- What Next- The city aims to reclaim its position as a crypto hub and attract many crypto firms
Despite the ongoing crypto ban in China, most Chinese state-owned banks have extended crypto-friendly aid to Hong Kong companies. This comes after a report from Bloomberg asserted that several Chinese state-owned banks have commenced offering services to local crypto firms in Hong Kong. This is a clear indication that the move by Hong Kong recently to become a digital asset center has been backed up by Beijing.
Crypto firms rushing into Hong Kong are finding a surprising source of potential support: China’s state-owned banks https://t.co/Q3txZOMr5r
— Bloomberg Crypto (@crypto) March 27, 2023
As per the people familiar with the matter in the March 27 report, the Chinese banks, including the Bank of Communications Co., Shanghai Pudong Development Bank, and the Bank of China Ltd, have either commenced offering banking services or have made inquiries to the local crypto firms. Notably, a source familiar with the matter claimed that a sales representative from one Chinese bank has already visited the office of a crypto platform to pitch its services.
However, the regulators have filed multiple enforcement actions against crypto platforms in the past few weeks, raising fears in the ecosystem. This became evident when various banks, including Silvergate Capital and Silicon Valley Bank, closed their doors. Nonetheless, Sung Min Cho, the founder of Beoble- a decentralized message app, stipulates that Chinese banks’ change was expected. He noted:
The push by Chinese lenders means a lot to us because it’s something you’d expect at this point, even around the globe.
Hong Kong embraces a crypto-friendly regulatory stance.
Recently, Hong Kong’s Secretary for Financial Services and the Treasury, Christian Hui, noted that over 80 virtual asset-related firms showed interest in establishing a presence in the city. Last year October, the government of Hong Kong released its policy statement on Virtual Asset Development.
On February 20, Hong Kong’s Securities and Futures Commission (SFC) introduced a regime for crypto trading firms. The new rules are set to be effective in June and require all crypto exchanges to be licensed by SFC. Additionally, the regulator noted that retail investors could trade “large-cap tokens” on approved exchanges. This will occur, given that the safeguards, including risk profiles and knowledge tests, are implemented.
Recently, Hong Kong has adopted a crypto-friendly space. The city aims to reclaim its position as a crypto hub and attract many crypto firms, especially those facing difficult times carrying out their operations in China.
The increased regulatory scrutiny in the United States gives Hong Kong a perfect chance to bring many crypto platforms onshore. Some firms may include Coinbase, which has recently faced an aggressive crackdown by the SEC.
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