Despite the ban on cryptocurrency in mainland China, multiple Chinese banks are endeavoring to broaden their range of services to include crypto companies that are operating in Hong Kong.
Chinese state-owned banks have surprisingly come out as regional supporters of cryptocurrency companies that are set up in Hong Kong for the upcoming introduction of a new licensing system for crypto exchanges in June, according to reports.
Bloomberg reported on March 27 that Chinese banks, including Shanghai Pudong Development Bank, the Bank of Communications Co., and Bank of China Ltd., have either begun to offer banking services to cryptocurrency firms in Hong Kong or have contacted crypto firms.
The Chinese government’s previous stance on crypto makes this collaboration with Chinese banks unexpected. Furthermore, Hong Kong regulators are formalizing and regulating the cryptocurrency industry.
This could lead to a shift in attitudes towards crypto and lend legitimacy to businesses. Nonetheless, there are still obstacles to overcome in this burgeoning field.
Although China has banned crypto, reports suggest that a Chinese bank’s sales representative visited the principal office of a crypto company to promote banking services.
Positive Impact On The Industry
Julia Pang, head of banking relations at OSL, expressed satisfaction with Chinese banks’ growing interest in the regulated cryptocurrency sector. A Hong Kong-based crypto trading platform is OSL. However,” Pang made the statement in response to a query.
She stated that this progress is positive for the industry and the broader ecosystem, as it signifies that traditional financial institutions are gaining a more mature comprehension of crypto.
The company’s representative refused to reveal information about state-owned Chinese banks’ possible approach to their organization. It is uncertain whether or not such contact occurred.
The Hong Kong government proposed implementing a crypto regulatory bill in October of the previous year. On February 20, the Securities and Futures Commission in Hong Kong unveiled its plan to introduce regulations for cryptocurrency exchanges.
Christopher Hui, Secretary for Financial Services and the Treasury Bureau, delivers the opening keynote and reinforces HK government’s vision to develop the virtual asset sector in Hong Kong.
He mentions Web 3 presents a paradigm shift to the internet era. pic.twitter.com/9MGkWOCj0O
— Everest Ventures Group (EVG) (@EVG_Ventures) March 20, 2023
This move is aimed at increasing investor protection and combating money laundering activities. The new rules will cover all virtual asset trading platforms that operate in or from Hong Kong, whether they trade security tokens, cryptocu, or other virtual assets.
It is anticipated that the regulations will be enforced by June. Hong Kong’s digital asset industry advances with new regulations, matching global standards and assuring investors of stability.
A report from February 20 states that delegates from the China Liaison Office frequently attend crypto events in Hong Kong. This suggests that China may monitor the development and usage of cryptocurrencies in the region.