Leading Chinese Banks Support Hong Kong-Based Crypto Firms: Report

Subsidiaries of some of China’s largest banking institutions, including Bank of Communications, Bank of China, and Shanghai Pudong Development Bank, have reportedly begun offering their services to, or approached, Hong Kong-based cryptocurrency firms.

The Special Administrative Region has recently emerged as a hub for digital assets, attracting many players in the industry to settle in the region. One such example is cryptocurrency exchange Huobi Global which is trying to get a business license there.

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Bloomberg recently coverage It revealed that the Hong Kong arms of Bank of Communications, Bank of China, and Shanghai Pudong Development Bank have shown strong interest in local crypto entities. People familiar with the matter revealed that sales representatives of an organization even visited the office of a digital asset company to provide services.

Sung Min Cho — founder of Web3-focused company Beoble — said the support from Chinese banks “means a lot” to local crypto companies. Remember, the Chinese central bank and its government are very critical of the digital asset sector, ban All activities related to it in 2021.

An executive at the Hong Kong branch of a major Chinese bank (whose identity has not been disclosed) stated that the favorable attitude from Beijing and the current uncertainty in the banking field in the United States provided an opportunity to explore the market.

Collaboration with banks has been a burden for most cryptocurrency companies globally, as many financial institutions are still reluctant to cooperate. At the same time, some of the few that did, such as US-based Signature Bank and Silicon Valley bank, ran into severe operational difficulties and were shut down by regulators earlier this month.

Hong Kong ambitions

Despite being a special administrative region of China, Hong Kong seems to have a very different view of digital assets.

Its authorities have previously shown intentions to legalize retail cryptocurrency trading and impose a friendly regulatory framework on the sector.

This has attracted many organizations, with Huobi Global being one of those. Justin Sun, a member of the platform’s advisory board, said it has applied for a trading license with Hong Kong watchdogs, describing the initiative as a “major step”.

He also announced the launch of a new trading venue in the region called Huobi Hong Kong, which will be “fully compliant with local regulations and offer a range of trading pairs and services to clients.”