Chinese Banks Embrace Crypto: Extending Support to Hong Kong-based Firms
Banks in mainland China are looking to expand their support for Hong Kong-based crypto firms amid the current crisis, according to a new report.
Amid recent regulatory moves in the US, crypto firms seek haven abroad or with Hong Kong emerging most friendly destination. Another report said a mainland Chinese bank lent aid to a Hong Kong cryptocurrency firm.
Key Takeaways
- China has banned cryptocurrency trading on its mainland.
- Shanghai Pudong Development Bank started offering banking services, to local cryptocurrencies.
- Hong Kong is one of many places cryptocurrency companies are eyeing a move.
Last month, reported on frequent visits by Chinese representatives to Hong Kong. Chinese banks have been in direct contact with cryptocurrency firms in recent months, according to the latest Bloomberg report.
China has banned cryptocurrency trading on its mainland but is trying to make Hong Kong a cryptocurrency hub in Asia. The recent banking crisis or regulatory actions in the US have forced banks to limit their services to cryptocurrency companies. This could be an excellent opportunity for Hong Kong to attract more crypto companies seeking a crypto-friendly destination.
Bloomberg, citing a source familiar with the matter, said:
“Bank of Communications, Bank of China Hong Kong branch, Shanghai Pudong Development Bank has started offering banking services to local cryptocurrency companies and has made inquiries into the field.”
One of the sources added that a sales representative from one of these banks also visited the cryptocurrency firm’s office to showcase its services. An executive at a Chinese central bank in Hong Kong said Beijing had given the go-ahead to promote cryptocurrencies.
Industry Welcomes The Move Of Chinese Banks To Hong Kong
Crypto industry insiders have included the development as they faced significant liquidity issues in light of the US rollout. Beoble founder and CEO Sung Min Cho told Bloomberg:
The pressure from Chinese lenders means a lot to us as it is
“unpredictable even globally at the moment. The trade bank cryptocurrency account is a breakthrough.”
Banking with cryptocurrency companies is easier said than done. The anonymity and erratic behavior of cryptocurrency companies are big red flags for traditional companies.
Hong Kong-based virtual bank ZA Bank recently said would be open to providing services to cryptocurrency companies that meet regulatory, and internal requirements. ZA Bank CEO Devon Sin said it had launched a pilot program for opening express business accounts.
But Hong Kong isn’t the only place cryptocurrency companies are eyeing a move. Several companies have also approached Swiss banks over the recent impact on the US bakery sector.
@cz_binance TWEET
In a significant development for the cryptocurrency industry in Hong Kong, several Chinese banks are reportedly extending support to firms operating in the territory. This move could provide a much-needed boost to the local industry, which has seen much uncertainty in recent years.
According to reports, several Chinese banks, including China Construction Bank, are now working to provide banking services to cryptocurrency firms in Hong Kong. This marks a significant shift in approach from these banks, who have previously been wary of providing such services amid regulatory uncertainty in Hong Kong.
The move comes after several prominent cryptocurrency firms in Hong Kong faced challenges securing banking services. With access to these services, firms can operate effectively and be able to seek alternative solutions.