The subsidiaries of some of the largest Chinese banking institutions, including the Bank of Communications, the Bank of China, and Shanghai Pudong Development Bank, have reportedly either started offering their services to cryptocurrency businesses based in Hong Kong or reached out to them.
The special administrative region has recently emerged as a digital asset hub, attracting numerous industry players to settle in the area. One example is the crypto exchange Huobi Global which is attempting to obtain a trading license there.
Hong Kong’s Crypto Push has China’s Backing?
A recent Bloomberg coverage revealed that the Hong Kong arms of the Bank of Communications, the Bank of China, and the Shanghai Pudong Development Bank had expressed strong interest in domestic crypto entities. People familiar with the matter disclosed that sales representatives of one of the institutions have even visited the office of a digital asset company to offer services.
Sung Min Cho – founder of the Web3-focused company Beoble – said the support from Chinese banks “means a lot” to the local crypto businesses. Recall that the central bank of China and its government are vocal critics of the digital asset sector, banning all activities related to it in 2021.
An executive at a branch of a major Chinese bank in Hong Kong (whose identity was not disclosed) stated that the positive stance from Beijing and the current uncertainty in the banking field in the US have provided an opportunity to explore the market.
Cooperating with banks has been a burden for most cryptocurrency firms globally, with many financial institutions still reluctant to cooperate. At the same time, some of the few to have done that, such as the US-based Signature Bank and Silicon Valley Bank, experienced severe operational difficulties and were shut down by regulators earlier this month.
Hong Kong’s Ambitions
Despite being China’s special administrative region, Hong Kong seems to have an entirely different view on digital assets.
Its authorities previously displayed intentions to legalize cryptocurrency retail trading and impose a friendly regulatory framework on the sector.
This has attracted many organizations, with Huobi Global being one of those. A member of the platform’s Advisory Board – Justin Sun – said it applied for a trading license with Hong Kong’s watchdogs, labeling the initiative a “major step.”
He also announced the launch of a new trading venue in the area called Huobi Hong Kong, which will be “fully compliant with local regulations and offer a range of trading pairs and services to customers.”