Hong Kong Monetary Authority (HKMA), the region’s banking watchdog, has reportedly urged major lenders to onboard crypto exchanges as clients. According to sources, institutions like HSBC and Standard Chartered are under pressure to embrace crypto despite increased regulatory oversight globally.
The move comes as Hong Kong seeks to establish itself as a global center for the cryptocurrency industry. Meanwhile, the sector faces challenges stemming from previous high-profile collapses.
Hong Kong Crypto Regulations — An Alternate Policy Approach
Hong Kong authorities actively encourage banks to embrace the sector, while US regulators discourage cryptocurrency exchanges. The Financial Times was able to get a letter from the HKMA dated April 27. It emphasized the need for the due diligence procedure not to place an “undue burden.” The agency was referring to businesses that wanted to have a presence in Hong Kong.
It has already questioned the Bank of China and lenders in the U.K. about their opposition to working with cryptocurrency clients.
Hong Kong drew a framework to legalize cryptocurrency buying, selling, and trading for all citizens beginning in June, as it has ambitious intentions to become an Asian crypto powerhouse.
The domestic market has gained confidence amid Hong Kong’s embracing more progressive cryptocurrency laws. It has resulted in several major businesses applying for licenses. Huobi HK, the global trading platform’s Hong Kong affiliate, has announced the opening of spot and managed services for both commercial and retail clients in the area.
After the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance and Coinbase,
Hong Kong is actively seeking to attract affected entities. BeInCrypto reported that lawmaker Johnny Ng urged Coinbase and other global virtual asset trading operators to apply for regional operating licenses.
Banking Industry Dilemma
The biggest online bank in Hong Kong, ZA Bank, made a huge foray into cryptocurrency in April. It announced a bridge between digital assets and fiat currency by announcing transfer and conversion services. However, the pressure from the HKMA brings to light the divergent perspectives in the banking sector.
The report notes that some senior executives at conventional banks are reluctant to accept cryptocurrency exchanges. The banks’ legal and regulatory concerns connected to know-your-customer and anti-money laundering laws are another liability.
But Hong Kong has long recognized that the way ahead would be paved with stringent rules. The U.S. regulatory authorities, however, adopt a tougher and more vague stance.
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