Hong Kong Is Reportedly Pushing Top Banks to Accept Crypto Firms as Clients

According to recent reports, Hong Kong’s central bank is supposedly pushing several major banks toward accepting crypto companies as their clients. The three targeted banks include the Bank of China, HSBC, and Standard Chartered.

The claims came from three unnamed individuals familiar with the matter. If true, this is likely part of Hong Kong’s effort to establish itself as a digital asset hub.

Hong Kong wants the local banks to onboard crypto firms

Anonymous informants have noted that the Hong Kong Monetary Authority (HKMA) has questioned a number of financial institutions about why they do not accept crypto companies. Given China’s general dislike of cryptocurrencies, it is not surprising that the local banks are not opening accounts for companies that deal in cryptocurrencies.

However, Hong Kong has its laws and regulations allowing it to provide banking services to digital asset firms. The problem is that most of them seemingly do not wish to expose themselves to crypto-related clients.

This is not the first time Hong Kong has questioned the banks’ decision not to serve crypto firms. Earlier this year, HKMA said the banks should support crypto companies in April. HKMA already made several steps to ensure that crypto users can enjoy all the benefits of digital assets on Hong Kong’s territory.

It legalized cryptos for retail clients, and its regulator, the Securities and Futures Commission (SFC) recently started accepting applications for digital currency trading. However, some assets have been ruled out, including crypto-staking products, crypto derivatives, and stablecoins.

After initially encouraging the banks to onboard crypto firms, the HKMA reported that there was certain resistance from the conventional banking mindset. This is why its new efforts are focused on the three largest lenders in Hong Kong, including the Bank of China.

Crypto exchanges are struggling due to the recent crypto crackdown

The country’s positive approach to cryptos also comes at the perfect time. A lot of cryptocurrency exchanges have found it difficult to find banking services, primarily due to the recent series of crackdowns on digital asset firms and the crypto industry in general. The US SEC recently filed lawsuits against Binance.US and Coinbase, and in Australia, Binance had to stop AUD deposits and withdrawals.

Challenges with a local payments service provider made it impossible for the company to continue “business as usual,” so the future of Binance in Australia still remains unsolved.

The SEC’s lawsuit is still the biggest and most controversial matter. It could have very negative consequences on the future of crypto in the US, especially since, for Binance, this is just one of its markets, while Coinbase has been considering leaving the US for some time now. Some have suggested that the US could become a Bitcoin-focused market, which would greatly blow the altcoins.

Hong Kong’s legislators saw an opportunity to get Coinbase to set up operations in the country, and they had already sent the exchange an invite to consider it. Apart from Hong Kong, Coinbase could also migrate to Bermuda, where it recently obtained a license to operate and offer crypto services, such as token issuance and sale. The company already launched a new crypto derivatives exchange in the island nation, but that could only be the beginning.