• Several Chinese banks have been offering services to crypto firms in Hong Kong.
• This is despite a ban on crypto activities on the mainland.
• The government of Hong Kong is introducing a new licensing regime for crypto exchanges in June.
Chinese Banks Offering Services to Crypto Firms
Several Chinese banks, including Shanghai Pudong Development Bank, the Bank of Communications Co., and Bank of China Ltd., have either started offering banking services to crypto firms in Hong Kong or made inquiries with crypto firms, according to “people with knowledge of the matter.” A spokesperson from OSL, a cryptocurrency trading platform based in Hong Kong, said they welcomed “growing interest from Chinese banks in engaging with the regulated crypto industry.”
Crypto Ban on Mainland China
Despite an ongoing ban on cryptocurrency activities on the mainland, Chinese banks are reportedly seeking out opportunities to provide services related to digital assets in Hong Kong. This move could be seen as a sign that these institutions are starting to recognize and accept cryptocurrencies as legitimate financial instruments.
Regulatory Framework for Crypto Exchanges
The government of Hong Kong has proposed a regulatory framework for cryptocurrency exchanges that will come into effect in June 2021. According to Christopher Hui, Secretary for Financial Services and Treasury Bureau, this bill presents a paradigm shift towards Web 3 and can help develop virtual asset sector within the city-state.
Positive Outlook For Crypto Industry
Julia Pang, head of banking relations at OSL believes that this development is encouraging for both the industry and broader ecosystem since it demonstrates traditional financial institutions’ maturing understanding of the cryptocurrency sector.
It appears that Chinese state-owned banks are showing growing interest in providing services related to cryptocurrencies despite ongoing bans elsewhere on the mainland. The upcoming regulatory framework proposed by Hong Kong’s government could open up more opportunities for such collaborations as well as boost confidence among investors looking at entering this space.