Cryptocurrency firms in Hong Kong preparing for the upcoming licensing regime for crypto exchanges have reportedly found some unexpected allies in Chinese state-owned banks. The Shanghai Pudong Development Bank, the Bank of Communications Co., and Bank of China Ltd. have either started offering banking services to crypto firms in Hong Kong or have made inquiries with crypto firms, according to sources with knowledge of the matter. These banks’ sales representatives have even visited some crypto firms’ main offices to pitch their services, despite the ongoing ban on cryptocurrency trading in China.
The increasing interest from traditional Chinese banks engaging with the regulated crypto industry is a positive sign for both the industry and its broader ecosystem, according to Julia Pang, head of banking relations at Hong Kong-based crypto trading platform OSL. The government of Hong Kong has proposed its own legislation to regulate cryptocurrency, and the Securities and Futures Commission is set to introduce its own regime in June of this year. This shows a maturing understanding of cryptocurrencies within traditional financial institutions.
Representatives from the China Liaison Office have also been attending many crypto-related events in Hong Kong, further evidence of the increasing popularity of cryptocurrencies in the region. The Secretary for Financial Services and the Treasury Bureau, Christopher Hui, has reinforced the Hong Kong government’s vision to develop the virtual asset sector in Hong Kong, stating that Web 3 presents a paradigm shift to the internet era.
With the involvement of Chinese state-owned banks, the cryptocurrency industry in Hong Kong is set to experience significant growth in the coming years. These partnerships will help foster greater acceptance of cryptocurrencies in traditional finance and provide more opportunities for innovation and development within the industry.
