Hong Kong’s central bank, the Hong Kong Monetary Authority (HKMA), has exerted pressure on major banks, including HSBC and Standard Chartered, to accept crypto exchanges as clients.
HKMA Encourages Banks to Embrace the Crypto Industry:
During a meeting in May, the HKMA inquired why major banks in Hong Kong, including HSBC, Standard Chartered, and the Bank of China, were not accommodating crypto exchanges as clients. Sources familiar with the matter revealed this information to the Financial Times on June 15.
To adapt to evolving market developments, the HKMA issued a circular on April 27. They urged banking institutions to adopt a more ambitious approach and explore new sectors such as the crypto market.
Specifically, the circular instructed banks to facilitate virtual asset service providers in accessing banking services. Further, it encouraged them not to shy away from this emerging industry.
Despite the HKMA’s encouragement, senior executives at traditional banks have shown resistance to accepting crypto clients. The Financial Times’ source revealed that opposition exists within these banks, but the HKMA is urging them to overcome their apprehension.
Cointelegraph reached out to the HKMA, HSBC, and Standard Chartered for comments but did not receive an immediate response.
US Regulatory Environment Adds to the Landscape
Hong Kong’s pro-crypto pressure coincides with a tumultuous regulatory environment for exchanges in the United States. On June 5, the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance for violating domestic securities laws, followed by a similar lawsuit against Coinbase on June 6.
The SEC’s legal actions have exerted significant pressure on Binance.US, straining its banking relationships in the US. Furthermore, Binance Australia recently suspended Australian dollar services after its banking ties were severed by local payments provider Zepto.
Support from Hong Kong Lawmakers
Contrasting the resistance from traditional banks, some lawmakers in Hong Kong have expressed a more welcoming stance toward crypto firms.
Legislative Council member Johnny Ng publicly voiced his support for Coinbase and even invited the company to establish operations on more favorable grounds.
New Crypto Regulations in Hong Kong
Hong Kong enacted a set of crypto regulations on June 1, enabling locally-licensed crypto firms to commence operations. These regulations empower licensed firms to offer services to retail investors, facilitating cryptocurrency trading, including popular options like Bitcoin and Ether.
This move signals Hong Kong’s intention to create a more regulated and favorable environment for crypto businesses.