Major banks, including HSBC, Standard Chartered, and Bank of China, were reportedly questioned by Hong Kong’s central bank about why they don’t accept cryptocurrency exchanges as clients.
Major banks, including HSBC and Standard Chartered, have reportedly come under pressure from the Hong Kong Monetary Authority (HKMA), the region’s central bank and regulator, to accept cryptocurrency exchanges as clients. This action underscores the HKMA’s advocacy for the implementation of more ambitious strategies for emerging markets like the cryptocurrency market.
In a meeting in May, the HKMA reportedly questioned numerous banks about their reluctance to accept cryptocurrency exchanges as clients, including U.K.-based companies and the Bank of China, according to sources cited by the Financial Times on June 15th.
The HKMA issued a circular to banking institutions in April asking them to keep up with emerging market trends and adopt a more proactive stance toward industries like cryptocurrencies. The document specifically highlighted the need for institutions to assist “virtual asset service providers” (crypto firms) in accessing banking services.
The HKMA’s efforts come at a time when American cryptocurrency exchanges are facing regulatory uncertainty. In contrast, several Hong Kong lawmakers have exhibited a friendlier disposition toward crypto companies.
A shift toward increased acceptance and integration of cryptocurrencies within the Hong Kong financial system may be seen in the HKMA’s push on large banks to accept crypto exchanges as clients.
On June 1st, Hong Kong put into effect new crypto legislation that allowed companies with local licenses to start operating. These rules permit registered businesses to offer services to individual investors, which facilitates bitcoin trading.
On June 10, Hong Kong Legislative Council member Johnny Ng tweeted his support for Coinbase, a bitcoin company dealing with issues in the United States. Ng even extended an invitation to Coinbase to start up shop in a more hospitable setting.
The HKMA’s action fits in with a global trend where regulatory bodies are attempting to balance investor protection and financial stability concerns while regulating and integrating cryptocurrencies into their current frameworks.