Top Honk Kong banks aren’t particularly eager to take the crypto clients, despite Hong Kong shifting gears to position itself as Asia’s crypto powerhouse.
According to the most recent FT report, Hong Kong’s banking authority has been exerting pressure on prestigious institutions like Standard Chartered and HSBC to accept cryptocurrency exchanges as customers.
According to sources, the Bank of China and the two lenders located in the UK were recently asked by the Hong Kong Monetary Authority (HKMA) about why they are unwilling to accept cryptocurrency customers.
The HKMA warned banks in a letter dated April 27 that investigating cryptocurrency companies shouldn’t “build excessive burden,” especially “for those who are opening a branch in Hong Kong to search for the opportunities here.”
Despite the fact that cryptocurrency is not prohibited, prominent banks are nevertheless reluctant to work with cryptocurrency clients out of concern that they would be held accountable if these clients use platforms for laundering funds or other unlawful behaviour.
However, the aforementioned situation might act as a barrier to Hong Kong’s efforts to become a major centre for cryptocurrency.
A familiar source said, “HKMA urged the banks to overcome their fear. We are observing a bit of opposition from top management at traditional banks. There is opposition from a typical banking mindset.”
The US SEC sued the cryptocurrency exchange Coinbase last week for breaking federal securities rules. Soon after, Coinbase was encouraged to establish a base in the area by the Hong Kong lawmaker.
Nevertheless, recent events have severely harmed financial institutions. A senior executive from one of the banks stated during a meeting of the banks that the banks”are walking a balance between being encouraged to promote crypto and exchange platforms on the one hand, and on the other hand, being mindful of the US scenario.”
The executive went on to say that banks were divided between wishing “to guarantee the growth of that sector if it’s a policy of the Hong Kong government” and despite being concerned about the possibility of being “chosen by the authorities on fighting money laundering or know-your-customer” problems.
Read more:
