Report Claim Chinese banks show interest in Hong Kong-based crypto firms
According to a recent report from Bloomberg, Chinese banks are now showing interest in crypto firms in Hong Kong. This has surprised the wider crypto community, given that China had once restricted digital currency transactions in the country.
In 2021, China imposed a strict law that states that anyone dealing with these digital assets risks going to jail. However, digital currency transactions in Hong Kong have increased despite China’s regulatory challenges. Several companies are even taking advantage of the city’s position due to its proximity to mainland China and as a financial hub.
Digital asset firms in Hong Kong are attracting the attention of Chinese banks
The report revealed that the major financial institutions in the category, which include Bank of China Ltd., Bank of Communication Co. and Shanghai Pudong Development Bank, either offering their services to digital currency firms or showing interest in providing financial services to them.
It also cited that some of the banks’ representatives have already gone a step further to visit the headquarters of a crypto firm, which comes as China tightens restrictions on cryptocurrency trading and mining.
While it remains unclear how these potential partnerships will work in practice, it is believed that Hong Kong’s more liberal regulatory environment could make it an attractive location for Chinese banks looking to explore cryptocurrency.
Meanwhile, Julia Pang, head of banking relations at OSL, a Hong Kong-based digital asset trading platform, said her company welcomes interest and partnerships with Chinese banks.
She added that recent developments encourage a good level of understanding between digital asset companies and traditional financial institutions.
As the crypto market continues to develop, it will be interesting to see how the partnership between Hong Kong-based digital asset firms and Chinese banks will grow, including its impact on the wider industry.
Crypto transactions in Hong Kong
Digital currency trading in Hong Kong has been going on for months. This appears from s bill the city released in October 2022, setting out the regulation of digital assets.
Aside from the bill, the city’s Securities and Futures Commission also issued a suggestion 20 February on regulation of digital currency trading platforms. The report revealed that this move would begin in June 2023.
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This will allow retail investors trade some virtual assets with large market capitalizations on licensed and regulated exchanges. Although the commission failed to note which tokens it will allow, it is possible that the board is referring to Bitcoin and Ethereum.
This move could revive the country’s web3 blockchain companies that gave up their local market and concentrated on international trade centers.
Some firms considered more profitable locations, such as Dubai and Singapore. However, with the latest developments in Hong Kong, these enterprises can bring their crypto businesses home.
Featured image from Pixabay and chart from Tradingview.com
