Crypto firms in Hong Kong get a boost from the regulator
The Hong Kong Monetary Authority (HKMA) has issued a circular asking banks to support crypto firms.
Dated April 27, the document reminds banks of their responsibility to provide access to banking services for legitimate businesses. In line with this objective, it emphasizes the importance of a risk-based approach to anti-money laundering efforts. However, it insists that these treat bank customers fairly.
Chinese banks warm to crypto
The HKMA’s latest intervention follows news that Chinese state-owned banks are looking to offer banking services to Hong Kong crypto companies.
Furthermore, Bank of Communications, Bank of China and Shanghai Pudong Development Bank have all reportedly reached out to potential customers in the city’s crypto space.
Recently, Hong Kong’s largest digital bank – ZA Bank – announced that it will enable transfers and conversions between cryptocurrencies and fiat. Meanwhile, as BeInCrypto reported, ZA Bank has already entered into agreements with digital asset exchanges HashKey and OSL.
Hong Kong Crypto License
Alongside Singapore, Hong Kong has emerged as one of Asia’s premier crypto hubs. And the city’s regulators have moved to monitor its growing crypto and Web3 space.
For Hong Kong’s crypto sector, the latest guidelines note that financial institutions “should endeavor to support virtual asset service providers (VASPs)” licensed by the Securities and Futures Commission (SFC). Also, the document was issued in anticipation of the launch of the city’s VASP license in May.
Under the new framework, cryptocurrency exchanges and other crypto firms will be required to register with the SFC. And unlike some licensing regimes elsewhere, the new rules will affect decentralized exchanges as well as their centralized counterparts.
In its latest advice, the HKMA emphasizes that before the new rules come into force, the banks should take due account of “approval in principle”. This means that the banks do not have to wait for companies to receive the VASP licence.
Instead, the regulator proposes that they treat approved firms as if the regime is already in place.
Crypto Investors See Opportunity in Hong Kong
With a dedicated regulatory framework and support from banks, Hong Kong is emerging as a place for crypto investment.
For example, in March ProDigital Futures, a Hong Kong-based investment company, announced its intention to launch a $100 million crypto fund.
In addition, Hong Kong hosted the WOW (World of Web3) Summit this week. The event included a competition where over 150 startups pitched in front of various investors, venture capitalists and accelerators. These include Cyberport, Newman Capital and Blockchain Founders Club.
Disclaimer
In accordance with the Trust Project guidelines, BeInCrypto is committed to objective, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify the facts independently and consult with a professional before making any decisions based on this content.
