Hong Kong pushes HSBC, Standard Chartered to onboard crypto exchanges
Hong Kong’s banking regulator is actively urging banks in the city-state to consider accepting cryptocurrency exchanges as clients, a notable departure from regulatory approaches in other jurisdictions.
According to a Financial Times report, the Hong Kong Monetary Authority (HKMA) has exerted pressure on prominent banks such as HSBC and Standard Chartered to take on crypto exchanges as their clients. Despite regulatory crackdowns in other parts of the world, the HKMA says it aims to create a more inclusive environment for the growth of the crypto sector in the region.
During a recent meeting, Hong Kong’s banking regulator reportedly questioned UK-based firms and the Bank of China about their reluctance to establish relationships with cryptocurrency exchanges. Additionally, in a circular dated April 27, HKMA advised banking institutions not to place an excessive burden on potential clients, particularly those looking to establish a presence in Hong Kong, during the due diligence process.
According to the document, the watchdog explicitly mandated financial institutions to assist cryptocurrency firms, referred to as “virtual asset service providers,” in obtaining access to banking services.
While Hong Kong banks have not banned clients involved in cryptocurrencies, a report suggests that there is hesitancy to engage with cryptocurrency exchanges. Concerns primarily revolve around the potential prosecution of banks if the platforms are exploited for illicit activities like money laundering.
Johnny Ng, a legislator from Hong Kong, inviteed Coinbase and other crypto exchanges earlier this week to establish a presence in the region against a backdrop of increasing hostility in their home jurisdictions.
The member of the Legislative Council said he’s ready to assist Coinbase and other interested platforms in the registration and development process within the former British colony. He also hinted at potential opportunities for stock listings, highlighting Hong Kong’s progressive approach towards cryptocurrencies.
The move also comes a few weeks after Hong Kong’s regulator revealed plans to permit licensed cryptocurrency platforms to cater to retail investors under its new regulatory framework for the sector.
The proposed guidelines encompass various aspects such as asset custody safety requirements, cybersecurity standards, and the segregation of client assets, among others. This was implemented from June 1, coinciding with the launch of a new licensing regime for virtual asset platforms.