FT: Hong Kong Pressures Banks to Take Crypto Exchanges as Clients: FT
The pressure shows how hard it will be for Hong Kong to become the center of the cryptocurrency business around the world.
Hong Kong’s banking regulator is putting pressure on banks in the city-state, such as HSBC and Standard Chartered, to work with cryptocurrency platforms, even though other places are cracking down on this.
At a meeting last month, the Hong Kong Monetary Authority (HKMA) asked the UK-based firms and the Bank of China why they didn’t want to work with bitcoin exchanges. Three people with knowledge of the situation told the Financial Times about the meeting.
Hong Kong Banks Should Accept Crypto Clients
In a letter from April 27, HKMA told the banks that they shouldn’t put too much stress on possible clients during their due diligence process. This was especially true for those who wanted to set up shop in Hong Kong to look for opportunities in other parts of Asia.
Hong Kong banks have not stopped customers who use cryptocurrencies from using their services. But the study said that people are hesitant to use exchanges because they are afraid of getting in trouble if the platforms are used for illegal things like money laundering.
“HKMA encouraged the banks to not be afraid. There is resistance from a conventional banking mindset… We are seeing some resistance from senior executives at traditional banks,” a person familiar with the matter said.
This pressure is a reminder of how hard it is for Hong Kong to become a major player in the global coin industry, even though there have been some shocking failures in the industry, like the end of FTX.
Using crypto
Hong Kong’s interest in the cryptocurrency industry is shown by its willingness to accept the sector, even though other regulatory bodies, like the U.S. Securities and Exchange Commission (SEC), have taken actions against important players like Binance and Coinbase. The SEC went to court against these global exchanges earlier this month, saying they broke U.S. securities rules.
Still, Hong Kong’s pro-business government has a positive view of crypto. It sees the possible benefits of the industry and is actively trying to become a center for it.
