Hong Kong government urges banking giants HSBC and standard chartered to embrace crypto clients:Report
In a bold move towards embracing the digital revolution, the Hong Kong Monetary Authority (HKMA), acting as the central bank and regulator of the region, has reportedly exerted pressure on major financial institutions, including HSBC and Standard Chartered, urging them to accept cryptocurrency exchanges as clients.
According to insider information obtained by the Financial Times on June 15, the HKMA held a meeting in May with prominent UK-based firms and the Bank of China, raising concerns about their hesitancy to onboard crypto exchanges. The central bank questioned its stance on this emerging sector, shedding light on the pressing need for a more open-minded approach.
The HKMA’s recent push follows a circular issued on April 27, less than a month prior, which encouraged banking institutions to closely monitor new market developments and adopt a proactive approach towards burgeoning sectors like cryptocurrency. In this directive, Hong Kong’s central bank explicitly instructed financial institutions to extend their support to “virtual asset service providers” by facilitating their access to banking services.
An anonymous source familiar with the meeting’s content revealed that the HKMA “encouraged the banks not to be afraid” of embracing cryptocurrency exchanges. However, it is worth noting that opposition to this bold move persists within some banking circles.
Hong Kong Legislators Welcome Crypto Firms Amid US Regulatory Turmoil
Hong Kong’s pro-crypto stance contrasts the regulatory turbulence witnessed in the United States, where exchanges grapple with stringent regulations.
On June 5, the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance, a leading exchange, for violating domestic securities laws. The following day, on June 6, the SEC also targeted Coinbase, another prominent exchange, with similar allegations.
The pressure from the SEC’s legal actions has reverberated across the industry, as Binance.US recently disclosed in a filing on June 12. The company revealed that the lawsuit had significantly strained its relationships with US banking partners. Additionally, Binance Australia abruptly suspended Australian dollar services, including withdrawals and deposits, after its banking ties were severed by local payments provider Zepto.
However, amidst this regulatory turmoil, confident lawmakers in Hong Kong have exhibited a more welcoming attitude towards cryptocurrency firms.
On June 10, Johnny Ng, a Hong Kong Legislative Council member, publicly expressed support for Coinbase, a crypto firm currently facing regulatory challenges. Ng even extended an invitation to Coinbase, urging them to establish their operations in Hong Kong, a more hospitable jurisdiction for the industry.
The proactive approach demonstrated by Hong Kong lawmakers aligns with the recent enactment of new crypto regulations on June 1. These regulations empower locally-licensed crypto firms to commence operations, allowing them to serve retail investors and facilitate cryptocurrency trading, including popular digital assets like Bitcoin (BTC), currently priced at $24,922, and Ether (ETH), valued at $1,636.
As the Hong Kong government intensifies its efforts to integrate cryptocurrencies into the mainstream financial landscape, the willingness of banking giants to embrace this emerging sector remains under scrutiny. With the contrasting regulatory climates between Hong Kong and the United States, the future trajectory of the industry in these regions hangs in the balance.