Subsidiaries of some of China’s largest banking institutions, including Bank of Communications, Bank of China, and Shanghai Pudong Development Bank, have reportedly either started offering their services to Hong Kong-based cryptocurrency firms or approached they.
The special administrative region has recently become a hub for digital assets, attracting many industry players to settle in the region. An example is crypto exchange Huobi Global which is trying to obtain a trading license there.
Hong Kong’s Crypto Push Has China’s Backing?
A recent Bloomberg blanket revealed that the Hong Kong branches of Bank of Communications, Bank of China and Shanghai Pudong Development Bank have shown strong interest in domestic crypto entities. People familiar with the matter revealed that sales representatives from one of the institutions even visited the offices of a digital asset company to offer services.
Sung Min Cho – founder of web3-focused company Beoble – said the support from Chinese banks “means a lot” to local crypto businesses. Recall that the central bank of China and its government strongly criticize the digital asset sector, prohibition all related activities in 2021.
An executive at a branch of a major Chinese bank in Hong Kong (whose identity has not been revealed) said that Beijing’s positive stance and the current uncertainty in banking in the United States have provided an opportunity to explore the market.
Cooperation with banks has been a burden for most cryptocurrency businesses around the world, with many financial institutions still reluctant to cooperate. At the same time, some of the few that did, such as US-based Signature Bank and Silicon Valley Bank, experienced severe operational difficulties and were shut down by regulators earlier this month.
Hong Kong’s ambitions
Despite being the Special Administrative Region of China, Hong Kong seems to have a totally different take on digital assets.
Its authorities have previously signaled their intention to legalize cryptocurrency retail trading and impose a user-friendly regulatory framework on the sector.
This has attracted many organizations including Huobi Global. A member of the platform’s advisory board – Justin Sun – said he had applied for a business license from Hong Kong’s watchdogs, calling the initiative a “big step”.
He also announced the launch of a new trading platform in the region called Huobi Hong Kong, which will be “fully compliant with local regulations and offer a range of trading pairs and services to clients”.
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