- Chinese state-owned banks have emerged as backers for
Bitcoinbusinesses establishing operations in Hong Kong.
- Despite China’s continued ban on cryptocurrency, all of this is true.
Chinese state-owned banks have reportedly proven to surprise supporters of cryptocurrency companies by setting up shops in Hong Kong.
The news comes ahead of the implementation of a new licensing framework for cryptocurrency exchanges in June.
Bloomberg reported on 27 March that Chinese banks have either begun to offer banking services to cryptocurrency firms in Hong Kong or have contacted crypto firms.
The banks offering services include Shanghai Pudong Development Bank, the Bank of Communications Co., and Bank of China Ltd.
According to one account, a Chinese bank sales representative even went to the headquarters of a crypto company to promote banking services. All of this is true despite China’s ongoing prohibition of cryptocurrencies.
All eyes on Hong Kong
Though trading in cryptocurrencies has been prohibited on the Chinese mainland for well over a year, Chinese banks have been directly contacting crypto firms over the past few months.
This is one of several indications that Beijing supports the city’s efforts to become a major digital asset center.
In response to a question, Julia Pang, head of banking relations at the Hong Kong-based OSL cryptocurrency trading platform, said that her company welcomed “growing interest from Chinese banks in engaging with the regulated crypto industry.”
This achievement, she said:
“Demonstrates a maturing understanding of the crypto sector by traditional financial institutions, which is encouraging for the industry and the broader ecosystem.”
The Hong Kong Securities and Futures Commission (SFC) on 20 February presented a proposal for a regime for cryptocurrency exchanges, slated to take effect in June after the Hong Kong government raised the notion of presenting its bill to regulate cryptocurrencies in October of last year.
SFC’s proposals include enabling retail investors to directly invest in virtual assets, the South China Morning Post reported last year.
Such a move would be a substantial departure from the SFC’s policy during the last four years, which has limited professional investors from trading cryptocurrency on centralized exchanges, Wong pointed out.
Individuals with portfolios worth at least $1 million, as of September 2021, are eligible investors.
Representatives from the China Liaison Office have been attending crypto events in Hong Kong, according to another report.
Some publications claim that Hong Kong has so far been successful in promoting the acceptance of cryptocurrencies. According to a report by Forex Suggest, Hong Kong has been voted the best-prepared country for mass crypto adoption.