Hong Kong Government is Forcing Banks to Accept Crypto Clients

The Financial Times reported on June 15 that the Hong Kong Monetary Authority (HKMA), the region’s central bank, had inquired UK-based firms HSBC and Standard Chartered along with the Bank of China in a May meeting as to why they weren’t taking on cryptocurrency trading platforms as their clients. 

Hong Kong Regulator’s Try to Convince Banking Firms

The Hong Kong regulator advised the financial organizations that they shouldn’t put an unnecessary burden particularly on crypto companies planning to establish headquarters in the city to look into potential clients. 

According to the individual familiar with the meeting’s outcome, the HKMA “encouraged the banks not to be afraid.” They also added: “We are seeing some resistance from senior executives at traditional banks.”

Optimistic Approach to Digital Assets

Notably, a document released on April 27 by HKMA asks banks to take an optimistic approach to new industries like the cryptocurrency market and associated exchanges, which it refers to as “virtual asset service providers.” 

Meanwhile, Johnny Ng, a member of the Hong Kong Legislative Council, tweeted his full backing for the troubled cryptocurrency company Coinbase and even offered an invitation for it to start doing business in a more welcoming environment.

Hong Kong Authorities Aim to Establish a Stable Industry

In addition to maintaining a welcoming approach to new crypto platforms, authorities in Hong Kong are trying to establish a stable financial industry. The city has recently made steps to adopt a strict regulatory approach. 

Crypto Firms are Being Encouraged to Submit a License Application

Just last month, the Hong Kong Securities and Futures Commission (SFC) stated that authorized businesses will soon be permitted to offer services to retail investors. Owners of virtual asset exchanges who are prepared to adhere to the SFC’s proposed regulations were encouraged to submit a license application. 

In general, Hong Kong’s choice to take a tight regulatory stance towards cryptocurrencies indicates its dedication to upholding a reliable and secure financial system while also safeguarding investors from possible dangers connected with this new asset class.