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Hong Kong-based crypto companies making ready for the brand new licensing regime for crypto exchanges in June have discovered surprising allies within the area. Chinese language state-owned banks, together with Shanghai Pudong Improvement Financial institution, the Financial institution of Communications Co., and Financial institution of China Ltd., have reportedly began providing banking companies to crypto companies in Hong Kong or have made inquiries with them, in line with “individuals with information of the matter” cited in a Bloomberg report revealed on March 27.
The Chinese language banks’ help for Hong Kong’s crypto business is noteworthy given the Chinese language authorities’s ongoing ban on crypto-related actions. One supply even claimed {that a} Chinese language financial institution gross sales consultant visited a crypto agency’s essential workplace to pitch banking companies.
“This growth is encouraging for each the business and the broader ecosystem, because it demonstrates a maturing understanding of the crypto sector by conventional monetary establishments,” stated a consultant from a Hong Kong-based crypto agency.
It’s unclear which crypto companies have been approached by the state-owned Chinese language banks, as a spokesperson for a agency declined to remark. Nevertheless, this transfer is seen as a constructive step in the direction of legitimizing crypto-related actions in Hong Kong.
In October 2022, the Hong Kong authorities proposed introducing its personal invoice to control crypto-related actions within the area. The Securities and Futures Fee of Hong Kong launched a proposal for a regime for cryptocurrency exchanges on February 20, which is about to take impact in June. The brand new licensing regime would require crypto exchanges to acquire licenses from the Securities and Futures Fee and adjust to rules on KYC (know-your-customer), AML (anti-money laundering), and different areas.
Regardless of China’s ban on crypto-related actions, representatives from the China Liaison Workplace have reportedly been attending Hong Kong crypto gatherings. This might sign a shift in China’s strategy to cryptocurrencies, because the nation appears to faucet into the rising marketplace for digital belongings.
The transfer by Chinese language banks to supply banking companies to crypto companies in Hong Kong additionally displays a rising pattern amongst conventional monetary establishments to embrace cryptocurrencies. As extra international locations introduce rules for crypto-related actions, monetary establishments are beginning to acknowledge the potential of digital belongings and the necessity to combine them into their present programs. This transfer may assist bridge the hole between the crypto business and conventional finance, paving the way in which for higher adoption of cryptocurrencies.
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