Hong Kong Crypto Firms Found Potential Support From Chinese Bank Branches

At least once, a sales representative of a Chinese bank visited a crypto company’s office to showcase their services, people familiar with the matter said.

Crypto firms rushing into Hong Kong are finding a surprising source of potential support: China’s state-owned banks https://t.co/e902ZdkdXa

— Bloomberg (@business) March 27, 2023

Despite the fact that trading in cryptocurrencies has been prohibited on the Chinese mainland for well over a year, Chinese banks have been directly contacting cryptocurrency businesses over the past few months. This indicates that Beijing supports the city’s efforts to become a major digital asset hub.

The lenders are filling a hole left by the failure of American tech banks Silicon Valley Bank, Silvergate Capital, and Signature Bank, which makes it a good time as well.

Bank of China, Bank of Communications, and Shanghai Pudong Bank did not respond to requests for comment at press time.

February 20, the Hong Kong government proposed rules allowing retail investors to trade cryptocurrencies on licensed exchanges, in stark contrast to mainland China where cryptocurrency-related exchanges are completely banned.

Hong Kong’s latest move to legalize retail crypto trade sends a strong message that Hong Kong is taking a different approach to regulating its capital markets, aiming to become a cryptocurrency hub.

With the latest easing protocol, Hong Kong’s crypto rules will be as open as the Singapore market. However, to prevent bad actors from taking advantage of loopholes in this area, the proposal made by Hong Kong stipulates that all virtual currency exchanges concentrate their operations in the city or market services to the public. The territory’s investors must obtain a Hong Kong Securities and Futures Commission license.

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