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Crypto Clients Get Greenlight: HK Govt Pressures Banks to Accept Them

• The Hong Kong Monetary Authority (HKMA) has recently asked major banks in the region, including HSBC and Standard Chartered, to accept crypto exchanges as clients.
• The HKMA issued a circular to banking institutions in April urging them to help crypto firms access banking services.
• The pressure on banks comes amid a turbulent regulatory environment for exchanges in the United States, with both Binance and Coinbase facing lawsuits from the SEC.

Hong Kong Central Bank Encourages Banks to Take On Crypto Clients

The Hong Kong Monetary Authority (HKMA), which serves as the region’s central bank and regulator, has reportedly put pressure on major banks, including HSBC and Standard Chartered, to accept crypto exchanges as clients. In April, HKMA issued a circular urging these institutions to provide services for cryptocurrency companies.

April Circular Urged Banks To Provide Services For Cryptocurrency Companies

The April 27 document from the HKMA specifically required banking institutions to assist “virtual asset service providers” in accessing financial services. A source familiar with the content of last month’s meeting said that the HKMA “encouraged the banks to not be afraid” of taking on crypto customers despite resistance from some senior executives at traditional banks.

Turbulent Regulatory Environment In U.S.

The pressure on Hong Kong’s major banks come amid a turbulent regulatory environment for exchanges in the United States. On June 5, 2020, the U.S Securities and Exchange Commission sued Binance for violating domestic securities laws while Coinbase was sued by SEC on similar allegations just one day later. Furthermore, Binance Australia was forced to shut down all Australian dollar services after its banking ties were severed by local payments provider Zepto.

Hong Kong Taking Lead On Crypto Regulations

Despite this difficult situation faced by cryptocurrency companies in other countries such as US, Hong Kong is taking a different approach towards cryptocurrencies by encouraging its banks not being afraid of embracing these new technologies despite resistance from some senior executives at traditional banks who are more conservative about it due to its high risk factor associated with it. This move further solidifies Hong Kong’s stance as an attractive destination for blockchain-related businesses and investments due their favourable regulations policies towards cryptocurrencies compared with many other nations around the world.

Conclusion

In conclusion, it is clear that Hong Kong authorities are taking a proactive approach towards supporting cryptocurrency businesses within their jurisdiction compared with many other nations around the world which could potentially make them into one of biggest players within this industry if they continue this trend going forward