WSJ: Hong Kong banks start serving crypto companies

Hong Kong banks, including a unit of the state-owned Bank of Communications, have begun taking crypto companies as new clients, according to WSJ.

Mostly, these organisations are opening corporate deposit accounts for digital-asset businesses, which can be used to service day-to-day operations and employee payments. However, some banks are going further and offering settlement services in the crypto-trading space.

According to the publication, Bank of Communications is already working with several licensed Web3-companies and is in talks with other regulated firms about opening accounts.

Representatives of the Hong Kong crypto group HashKey Group outlined plans to launch a new exchange that would ‘facilitate trading of Bitcoin, Ethereum and USDT‘. To implement the initiative, the firm will begin collaborating with the local virtual bank ZA Bank and Bank of Communications.

Earlier, ZA Bank said that the organisation would act as an intermediary for deposits and withdrawals from crypto-trading platforms.

Shixin Mao, CEO of crypto custodian Cobo, stressed that Western banks are reluctant to provide services to Web3 companies due to tightening regulatory regimes in the United States.

In October 2022, the Hong Kong Financial Services and Treasury Bureau published a statement on the easing of restrictions on cryptocurrencies and readiness to engage with virtual-asset service providers.

In January 2023, Hong Kong’s Financial Secretary Paul Chan said the readiness of the jurisdiction to accept crypto companies from around the world. He noted that authorities had recently completed work on the licensing regime for the industry.

In February, Chan said that Hong Kong will allocate $6.4 million in the annual budget to accelerate the development of the Web3 ecosystem. The funds will also be directed to support the G-Rocket accelerator, which started operating earlier this year.