The Hong Kong Monetary Authority (HKMA), which acts as the region’s central bank and regulator, has reportedly pressured major banks including HSBC and Standard Chartered to accept cryptocurrency exchanges as clients.
According to one news of the June 15 Financial Times, citing three sources familiar with the matter, The HKMA questioned UK-based companies, as well as the Bank of China, at a meeting in May, asking the institutions why they were not accepting cryptocurrency exchanges as clients.
Less than a month earlier, on April 27, the HKMA issued a circular to banking institutions urging them to pay attention to new market developments and encouraging them to take a more ambitious approach towards new sectors such as the cryptocurrency market.
In it document, Hong Kong’s central bank specifically requires institutions to help crypto firms, which it calls “virtual asset service providers,” to access banking services.
According to a source familiar with the content of last month’s meeting, the HKMA “encouraged banks not to be afraid.” The source added that there is opposition to accepting crypto clients.
“We are seeing some resistance from senior executives at traditional banks,” they said.
Cointelegraph reached out to the HKMA, HSBC and Standard Chartered for comment but did not immediately receive a response.
Hong Kong’s push for cryptocurrencies comes amid a turbulent regulatory environment for exchanges in the United States.
On June 5, the US Securities and Exchange Commission sued Binance for violating national securities laws.. The next day, June 6, the SEC sued Coinbase over similar allegations.
In a June 12 presentation, Binance.US claimed that the SEC lawsuit was putting significant pressure on its relationships with its US banking partners. Additionally, Binance Australia was recently forced to shut down all Australian dollar services, including withdrawals and deposits, after its banking ties were severed by local payment provider Zepto.
Meanwhile, some Hong Kong lawmakers seem more favorable to cryptocurrency companies.
10th of June, Johnny Ng, member of the Hong Kong Legislative Council, tweeted his support for embattled cryptocurrency company Coinbase and went so far as to invite her to establish her operations on friendlier ground.
I hereby offer an invitation to welcome all global virtual asset trading operators including @coinbase to come to HK for application of official trading platforms and further development plans. Please feel free to approach me and I am happy to provide any assistance. pic.twitter.com/bcIi1IjMlc
— Johnny Ng 吴杰庄 (@Johnny_nkc) June 10, 2023
On 1st June, Hong Kong enacted a new set of cryptocurrency regulations that allowed locally licensed cryptocurrency companies to start operating. From then on, any company with a valid license can provide services to retail investors, allowing them to trade cryptocurrencies, including Bitcoin (BTC) and ether (ETH).
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