The Hong Kong Monetary Authority (HKMA), the region's central bank and regulator, has reportedly put pressure on major banks, including HSBC and Standard Chartered, to accept cryptocurrency exchanges as clients.
According to a June 15 report in the Financial Times, which cited three sources familiar with the matter, the Hong Kong Monetary Authority questioned British firms, as well as Bank of China, at a meeting in May asking why the institutions did not accept Cryptocurrency exchanges as clients.
Less than a month ago, on April 27, the Hong Kong Monetary Authority issued a circular to banking institutions urging them to pay attention to new market developments and encouraging them to take a more ambitious approach to new areas such as the crypto market.
In the document, Hong Kong's central bank specifically asks the institutions to help crypto companies it calls “virtual asset service providers” obtain banking services. The MAS "encouraged banks not to be afraid", according to a source familiar with last month's meeting .The source added that there was opposition to accepting cryptocurrency clients.
"We're seeing some resistance from senior executives at traditional banks," they said. A spokesperson for the HKMA told that the implementation of the new VASP regulatory framework is an important part of the technology development ecosystem and that banks operating in Hong Kong shou ld “Strive to meet the legitimate business needs of licensed VASPs.” The HKMA declined to comment further on the content of May's meeting.
Likewise, a spokesperson for Standard Chartered said it was in "regular dialogue" with regulators, but could not reveal any other details on the matter. A representative for HSBC told that it "has an active dialogue with virtual asset players, exchanging views on a range of topics,” and that it remains “very focused on policies and developments in this nascent industry in Hong Kong.” The pressure in Hong Kong to support cryptocurrencies comes from a volatile regulatory environment for US exchanges. On June 5, the SEC sued Binance for violating domestic securities laws. The next day, June 6, the SEC sued Coinbase with similar charges.
In a filing dated June 12, Binance.US claimed that the SEC lawsuit has put significant strain on its relationship with its Bank of America partner. Additionally, Binance Australia was recently forced to shut down all Australian dollar services, including withdrawals and deposits , after The banking relationship was severed by local payments provider Zepto. Meanwhile, some lawmakers in Hong Kong appeared to be more welcoming to crypto companies.
On June 10, Hong Kong legislator Johnny Ng expressed support for struggling cryptocurrency firm Coinbase on Twitter, even inviting it to do business on a friendlier basis. Hong Kong enacted a new set of crypto regulations on June 1, allowing locally licensed cry pto firms to start operating. From this point on, any company with a valid license can offer services to retail investors, allowing them to trade cryptocurrencies, including Bitcoin and Ethereum.
