Hong Kong is urging major banks in the region to support crypto exchanges to promote Bitcoin, Ethereum, Litecoin and other cryptocurrencies.
Regulatory uncertainty in the west makes Hong Kong the hub for cryptocurrencies.
Hong Kong is reportedly urging banks in the region to support crypto exchanges and related businesses. Hong Kong regulators have asked HSBC and Standard Chartered to accept crypto exchanges as clients. The Hong Kong Monetary Authority (HKMA) inquired with the two UK-based banks, as well as the Bank of China, about the reasons for their reluctance to serve crypto companies.
In its bid to become a hub for digital assets, Hong Kong took the first step earlier this month when it rolled out new licensing requirements for crypto exchanges. Unlike the West, whose regulations have long hampered cryptocurrency adoption and the formation of crypto firms, Hong Kong has taken a balanced approach that encourages adoption and emphasizes investor protection. This is clearly evident in the government’s crypto development policy.
In a letter dated April 27, the HKMA questioned banks about their reluctance to serve businesses looking for crypto opportunities in the region. The regulator urged traditional banks to embrace the new business and have no reservations:
“The HKMA encourages banks not to fear. There is resistance from a conventional banking mentality… we see some resistance from the executives of traditional banks.”
According to some sources, banks are caught between the need to adopt government policies and scrutiny concerns regarding anti-money laundering and KYC issues. Both Standard Chartered and HSBC have stated that there is ongoing communication between them and the government and that they are actively monitoring the development of the crypto industry in the region.
Hong Kong is particularly targeting US companies
The latest development in Hong Kong comes at a time when US policy appears to be strangling the industry. Earlier this month, the US Securities and Exchange Commission (SEC) filed lawsuits against two of the largest crypto exchanges, Binance and Coinbase. The authority has already taken action against other crypto exchanges in the past.
She is also still locked in a now two-year legal battle with US tech company Ripple, in which she wants to prove that the company illegally sold securities.
Ripple has threatened to exit the US market in the past, with Hong Kong emerging as one of the possible new locations for its headquarters. Although Coinbase has never mentioned exiting the US market, it has raised concerns that the recent attacks could deter crypto companies from the US.
If this trend continues, Hong Kong could become the crypto hub of the world.
Picture Copyright: pranodhm
[newsletter_form lists="1"]
