Chinese Banks Offering Support to Hong Kong-based Crypto Firms
Over the last few months, Hong Kong is working its way to become the crypto hub of Asia as it opened its doors to the battered sector last year around September 2022. However, the latest report in the town is that authorities from the mainland China as well as banks are offering support to Hong Kong-based crypto firms.
Sources familiar with the matter told Bloomberg that Chinese banks have been directly reaching out to crypto businesses over the last few months despite the ban on crypto in mainland China.
As per the people familiar with the matter, the Hong Kong arms of Bank of Communications Co., Bank of China Ltd. and Shanghai Pudong Development Bank have started receiving inquiries from crypto firms or have already started offering banking support. One person said that the sales representatives from one Chinese bank also visited the office of crypto companies to pitch their services.
This development comes just at a time when US regulators have been tightening their grip over banks offering services to crypto firms. Earlier this month, the US authorities announced the shutdown of two crypto-friendly firms - Silvergate Capital and Signature Bank.
These actions have resulted into major liquidity crunch for firms operating in the crypto space as well as the crypto markets. It seems that the Chinese banks are seeing a major opportunity here while making Honk Kong an attractive destination for more crypto firms to set up base. Also, it comes just at a time when the West is making a collective effort to bring more regulatory measures in crypto.
A top executive from a major Chinese Bank having a branch in Hong Kong, who asked not to be named, said that Beijing’s uncertain crypto push and the local lending situation has provided an opportunity. Also, as per the earlier report, Chinese officials have been making round at several digital assets events in Hong Kong over the last few months.
Banking for cryptocurrency businesses has never been an easy task considering the anonymity as well as the volatility of the industry. Hong Kong-based crypto firms and startup who got in touch with Bloomberg noted that digital asset firms have been forced to find several workarounds to meet the operational banking needs.
Also, for crypto firms to open a corporate banking account, the waiting times are often very large. Hong Kong-based virtual bank ZA Bank stated that it is open to offering its services to crypto firms who pass regulatory and internal requirements.