The Hong Kong Monetary Authority (HKMA) is urging banks to provide much-needed services to crypto companies as part of a multi-faceted push to establish the city as a hub for the industry. The watchdog expects that regulated virtual asset service providers (VASPs) will be able to apply for a bank account through a reasonable process. In a circular sent later, the HKMA urged banks to support licensed crypto firms with their legitimate need for bank accounts.
These updates come as Hong Kong’s Securities and Futures Commission plans to publish guidelines on its licensing regime for crypto exchanges in May. It’s all part of a push to establish Hong Kong as a crypto-friendly jurisdiction, even as other regulators in other major financial hubs crack down on the sector. For instance, authorities in the US have been putting pressure on the crypto industry, while in Europe, banks have been blocking transfers to crypto exchanges.
Hong Kong’s move is significant as it signals a more welcoming approach to crypto in a time when other financial centers have been tightening regulations on the sector. The HKMA’s move is a boost to VASPs in Hong Kong, as having a bank account is essential to their operations. The regulator’s efforts to establish Hong Kong as a crypto-friendly jurisdiction could also attract more companies in the sector to set up shop there, boosting the city’s economy.
Furthermore, the move could also benefit traditional financial institutions, as crypto companies may need other banking services beyond just a bank account, such as loans or credit facilities. Overall, Hong Kong’s push to establish itself as a hub for the crypto industry is a positive step for the sector and could have significant implications for the global adoption of cryptocurrencies.
