Hong Kong’s ambition of becoming a digital-assets center is being supported by the city’s banking sector, which includes the local branch of large Chinese state-owned banks. The Hong Kong government has been actively working to grow the sector, which has resulted in an increase in the number of cryptocurrency exchanges and businesses based in the city.
To facilitate regular company functions like salary disbursement, banks have introduced deposit accounts for crypto firms. Some even provide trade-settlement services for cryptocurrencies, something conventional lenders have avoided doing due to the high level of risk involved.
This comes as they want to take advantage of the situation that has arisen as a result of the recent collapses of crypto-friendly American banks and the tightening of regulations in the United States concerning the cryptocurrency industry.
Businesses indulging in crypto
Several cryptocurrency businesses have reported that the Hong Kong branch of the Chinese government’s Bank of Communications is cooperating with local cryptocurrency businesses and is in discussions with other regulated businesses about creating accounts for them. On Friday, Hong Kong-based digital asset service provider HashKey Group announced plans to create a new regulated exchange called HashKey Pro, which would allow users to buy and sell Bitcoin, Ether, and Tether.
Local virtual bank ZA Bank and Bank of Communications (Hong Kong) Ltd. were cited as having agreed to facilitate the depositing and withdrawal of fiat currencies on the exchanges.Â
According to Devon Sin, ZA Bank’s alternative chief executive will be able to open accounts denominated in U.S. dollars, Hong Kong dollars, and Chinese yuan for the benefit of the exchange and its customers.
Swiss cryptocurrency bank and investment firm SEBA Bank AG are reportedly looking into obtaining local banking licenses in both Singapore and Hong Kong. Before the Chinese government outlawed all cryptocurrency transactions in 2021, the country was a key hub for trading and mining.
In the past, Chinese financial institutions were hesitant to invest in cryptocurrency. In 2020, a branch of China Construction Bank sought to market a digital bond that could be purchased using Bitcoin on foreign shores, but the sale was canceled due to scrutiny from Chinese authorities.Â
The government of semi-independent Hong Kong, on the other hand, has lately shown its support for the digital-assets sector.
John Lee, the city’s Beijing-appointed leader, spoke at the opening ceremony for a Web3 technology institute on Tuesday, calling the present a “golden” opportunity to begin developing the Web3 industry.
