Crypto Firms Surge: China’s state-affiliated banks are onboarding in Hong Kong

Chinese banks are granting regulated crypto companies bank accounts, and some of these banks are also serving as payment intermediaries for the digital asset platform. Hong Kong’s desire to become a crypto hub has created opportunities for not only crypto firms but also several Chinese state-affiliated institutions.

Although there is a complete ban on cryptocurrency-related operations in mainland China, these banks have expressed interest in collaborating with regulated cryptocurrency companies in Hong Kong and bringing them on board.

According to The Wall Street Journal report, the bank is discussing the possibility of providing account services to regulated firms. It works with various cryptocurrency firms based in Hong Kong. The bank is currently discussing opening accounts for these regulated companies.

ZA Bank, the largest virtual bank in Hong Kong and controlled by Chinese internet insurer ZhongAn Online P&C Insurance, will join the Bank of Communications as a settlement bank for cryptocurrency companies. Together, the two banks will enable the deposit and withdrawal of fiat currencies.

These banks will act as settlement banks for authorized exchanges. Token deposits will be converted to HKD, CNY, and USD, and digital asset businesses can use their account services.

Hong Kong’s Crypto Push Attracts Chinese Banks & Funds

At the beginning of the year, Paul Chan, the financial secretary of Hong Kong, made it clear that the city intends to partner with more crypto companies in 2023. The government’s progressive approach towards cryptocurrencies has resulted in a significant increase in interest from cryptocurrency firms.

Approximately over 80 firms have expressed interest in expanding their existing business or establishing a new one in Hong Kong. Interestingly, Chinese banks and funds have become unexpected supporters of the government’s efforts to promote cryptocurrencies in the city.

CPIC Investment Management, a company supported by the Chinese government, has launched two cryptocurrency funds. Institutional investors are the target of the funds. They are the latest offerings from CPIC, the second-largest insurance provider in mainland China.

CPIC also facilitates the registration of cryptocurrency companies and assists compliant entities in opening bank accounts. China has conducted various crackdowns on crypto-related activities in mainland China.

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However, China’s increasing interest in crypto through Hong Kong has surprised many in the crypto ecosystem. The shift in China’s stance towards crypto through Hong Kong has raised questions about the country’s overall approach to cryptocurrencies. It remains to be seen how this development will impact the broader crypto landscape.