Subsidiaries of some of the largest Chinese banking institutions, including Bank of Communications, Bank of China, and Shanghai Pudong Development Bank, have reportedly started offering their services to Hong Kong-based cryptocurrency companies. or communicated with them.
The special administrative region has recently become a hub for digital assets, attracting numerous industry players to establish themselves in the area. One example is cryptocurrency exchange Huobi Global, which is trying to get a trading license there.
Is the Hong Kong Crypto Push Backed by China?
A recent Bloomberg coverage revealed that the Hong Kong arms of the Bank of Communications, the Bank of China, and the Shanghai Pudong Development Bank had expressed keen interest in domestic crypto entities. People familiar with the matter revealed that sales representatives from one of the institutions have even visited the office of a digital asset company to offer services.
Sung Min Cho, founder of Web3-focused startup Beoble, said support from Chinese banks “means a lot” for local crypto businesses. He remembers that China’s central bank and its government are vocal critics of the digital asset sector, forbidding all activities related to it in 2021.
An executive from a branch of a major Chinese bank in Hong Kong (whose identity was not released) said that Beijing’s positive stance and the current uncertainty in the US banking field have provided an opportunity to explore the market.
Cooperating with banks has been a burden for most cryptocurrency companies globally, and many financial institutions are still reluctant to cooperate. At the same time, some of the few that have, such as US-based Signature Bank and Silicon Valley Bank, experienced severe operational difficulties and were shut down by regulators earlier this month.
Hong Kong’s ambitions
Despite being China’s special administrative region, Hong Kong seems to have a completely different view of digital assets.
Its authorities previously showed intentions to legalize retail cryptocurrency trading and impose a friendly regulatory framework on the sector.
This has attracted many organizations, Huobi Global being one of them. A member of the platform’s Advisory Board, Justin Sun, said he applied for a business license with Hong Kong watchdogs, calling the move a “big step.”
It also announced the launch of a new mall in the area called Huobi Hong Kong, which will “fully comply with local regulations and offer a range of trading pairs and services to customers.”
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