Hong Kong authorities urge banks to service licensed crypto firms

Financial institutions should support regulated, digital-asset-related companies in meeting their banking-service needs. This is stated in a заявлении by HKMA Deputy Chief Executive Arthur Yuen.

“There are no statutory or regulatory requirements prohibiting Hong Kong banks from providing services to organisations related to virtual assets,” the official noted.

The recommendation is part of the Chinese Special Administrative Region’s initiative to create conditions for the development and promote Web3-ecosystem.

The regulator noted the need for staff training and forming special teams to support the digital-asset sector. HKMA proposed avoiding a “risk-reduction approach” that excludes work with new industries or a particular jurisdiction/nationality.

In February, the WSJ drew attention to the fact that banks are ending cooperation with crypto firms due to possible regulatory crackdowns. The authorities threaten to separate digital assets from the traditional financial system.

The catalyst for supervisory concerns was the FTX crash and the events it triggered in the industry.

The situation was worsened by the rescues of industry-friendly Silicon Valley Bank and Signature Bank , as well as the liquidation of Signature Bank.

Against the backdrop of difficulties finding banking partners and regulatory pressure many crypto firms, including Coinbase and Gemini did not rule out leaving the United States for other jurisdictions.

In 2023, Hong Kong authorities began drafting rules for licensing crypto exchanges and issuers of stablecoins.

Mid-April, media reported that Hong Kong banks, including a unit of the state-owned Bank of Communications of China, began accepting crypto companies as new clients. Publicly, ZA Bank, the largest virtual bank, stated such a position.

Analysts at Blofin Academy have suggested that the popularisation of stablecoins in Hong Kong dollars could be a driver for Bitcoin growth.