Banking Giants in Hong Kong Pressured by Government to Accept Cryptocurrency Clients: Report

The Hong Kong Monetary Authority (HKMA), acting as the region’s central bank and regulator, has allegedly exerted pressure on major banks such as HSBC and Standard Chartered to accept crypto exchanges as customers.

In a May meeting, the Hong Kong Monetary Authority (HKMA) reportedly questioned the Bank of China and other UK-based firms, as per a June 15 report from the Financial Times which sourced three individuals familiar with the situation, inquiring as to why they were not accepting cryptocurrency exchanges as customers.

Less than a month ago on April 27, the HKMA issued a circular to banking institutions, emphasizing the need to be aware of new market developments and to take a more proactive approach to new sectors such as the crypto market.

The central bank of Hong Kong has specifically mandated the financial institutions to aid “virtual asset service providers” (VASPs) in acquiring banking services.

According to someone informed about the topics discussed at the gathering last month, the HKMA urged the banks not to be scared. The informant also mentioned that there was opposition to accepting crypto customers.

The representatives stated that they have encountered opposition from higher-ups in established banks.

Cointelegraph attempted to obtain a comment from the HKMA, HSBC and Standard Chartered but did not receive an immediate reply.

Amid a turbulent regulatory climate for exchanges in the US, Hong Kong has been putting pressure on the pro-crypto movement.

On June 5, the United States Securities and Exchange Commission (SEC) took legal action against Binance for breaching domestic securities regulations. The following day, June 6, the SEC filed a lawsuit against Coinbase for similar allegations.

In its June 12 filing, Binance.US stated that the SEC’s lawsuit was putting a great strain on its associations with its banking partners in the U.S. Furthermore, Binance Australia was obliged to close all AUD services, comprising of withdrawals and deposits, after its banking links were cut off by local payments supplier Zepto.

Hong Kong is well-positioned to become a major cryptocurrency hub due to its regulatory leadership.

Meanwhile, certain legislators from Hong Kong appear to be more accepting of crypto companies.

On June 10, Johnny Ng, a member of the Hong Kong Legislative Council, voiced his endorsement of embattled crypto firm Coinbase on Twitter and even extended an invitation for it to move to a more welcoming environment.

On June 1, Hong Kong put into effect a set of crypto regulations that enabled locally-approved crypto companies to start up. From that point on, any company with a legitimate license can provide services to individual investors, enabling them to trade cryptocurrencies such as Bitcoin (BTC) and Ether (ETH).

The team behind the Yuan stablecoin has been arrested, WeChat has released new Bitcoin prices, and Hong Kong has established new regulations for cryptocurrencies.