The region's central banking body and regulator, the Hong Kong Monetary Authority (HKMA), has called on banks to provide services to cryptocurrency companies.
On April 27, the Hong Kong Monetary Authority issued a circular on the use of banking services by corporate customers. In the document, the regulator asked the authorized body, dubbed "AI," to take a risk-based approach to its anti-money laundering efforts.
The HKMA also urged Hong Kong institutions to pay attention to market developments and adopt a forward-looking attitude towards new areas such as the encryption market. Hong Kong's central bank specifically asked institutions to help virtual asset service providers (VASP s) access banking services, state : "Authorized institutions should strive to support virtual asset service providers licensed and regulated by the Securities and Futures Commission in meeting their legitimate needs to open bank accounts in Hong Kong."
The regulator emphasized that customer due diligence (CDD) measures should be commensurate with a client's risk level so as not to place an undue burden on clients.
For example, if a VASP has applied for a license under Hong Kong's new cryptocurrency regulatory regime and only wants to open an account for its own business use, the accreditation body should offer the service even before approval, the HKMA said. Authorities wrote: " [The authorizing body] should give due consideration to the 'approval in principle' issued by the relevant authorities to VASP license applicants during the CDD process, rather than taking no action until the VASP license is actually granted."
Additionally, the statement encourages lenders to train staff and create dedicated departments to support the cryptocurrency industry, while avoiding a “wholesale de-risking approach” that rejects new industries or certain countries.
The news comes as Hong Kong prepares to adopt new crypto regulations that will officially allow retail investors to buy and sell cryptocurrencies such as bitcoin and ether. As previously reported, the new crypto licensing regime is scheduled to be implemented on June 1 , 2023. While Hong Kong has been actively attracting crypto companies, some major global jurisdictions such as the United States have held back the industry to some extent. Several major exchanges, including Coinbase, have considered leaving the US due to the government's reluctance. ctance to enact clear crypto regulations. According to a report by Andreessen Horowitz, from 2018 to 2022, the US share of global cryptocurrency developers will drop by 26%.
