According to sources familiar with the matter and a letter, the Hong Kong Monetary Authority (HKMA) is applying pressure on HSBC, Standard Chartered, and the Bank of China to consider accepting crypto exchanges as clients.
The Financial Times reported that in a letter dated April 27, the HKMA highlighted the importance of conducting due diligence on potential customers without creating an undue burden, especially for those seeking business opportunities in Hong Kong.
Hong Kong has recently shown aspirations to become a prominent global crypto hub, as evidenced by the acceptance of applications for crypto trading platform licenses by its Securities and Futures Commission (SFC) starting June 1.
Certain lawmakers from Hong Kong are demonstrating a more receptive stance towards crypto firms. On June 10, Johnny Ng, a member of the Hong Kong Legislative Council, publicly expressed his support for Coinbase, a crypto firm facing challenges. Ng took to Twitter and extended an invitation for Coinbase to consider establishing its operations in a more favorable environment.
It is worth noting that the HKMA’s discussion with the three banks in question addressed why they had not yet embraced crypto exchanges as clients.
While resistance from traditional banking executives was reported, the HKMA reportedly encouraged the banks to overcome their hesitancy. The relationship between banks and crypto companies globally has been complex, with instances of payment processors severing ties with local exchanges in India and reports of Australian banks blocking payments to crypto exchanges.
Although no ban on crypto clients exists, banks may be cautious due to concerns over potential legal challenges in cases of fraudulent activities. At the time of reporting, HSBC, Standard Chartered, the Bank of China, and the HKMA had not provided immediate comments on the matter. However, HSBC and Standard Chartered stated that they regularly engage with regulators to discuss policies and industry developments.
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