The Hong Kong Monetary Authority (HKMA) has intensified its efforts to encourage major banks, including HSBC, Standard Chartered, and Bank of China, to onboard crypto exchanges as clients, according to sources familiar with the matter and a letter obtained by the Financial Times. The letter, dated April 27, emphasized that the due diligence process for potential customers should not create an undue burden, especially for those seeking opportunities in Hong Kong.
This move comes as Hong Kong actively positions itself as a global hub for cryptocurrencies. The city’s Securities and Futures Commission (SFC) began accepting applications for crypto trading platform licenses on June 1, aligning its ambitions with the recent lawsuits filed by U.S. authorities against prominent cryptocurrency exchanges, Binance and Coinbase.
During a meeting held last month, the HKMA questioned HSBC, Standard Chartered, and Bank of China about their reluctance to engage with crypto exchanges as clients. Despite being among the largest banks globally, these institutions have shown resistance due to concerns stemming from traditional banking mindsets, as reported by sources familiar with the discussion.
Crypto companies have faced challenges in establishing relationships with banks and payment settlers worldwide. In India, certain payment processors severed ties with local exchanges last year, while reports have emerged of Australian banks blocking payments to crypto exchanges. Although no ban on crypto clients currently exists, banks have been cautious about potential legal challenges associated with fraudulent activities within the industry.
HSBC expressed its active engagement with virtual asset players, emphasizing its commitment to understanding various topics, including account opening, and staying informed about the policies and developments within the nascent industry. Similarly, Standard Chartered stated its ongoing dialogue with regulators on different subjects. However, Bank of China and the HKMA did not provide immediate comments when approached.
As Hong Kong aspires to become a global crypto hub, it seeks to attract prominent players in the industry. A Hong Kong lawmaker extended an invitation to Coinbase to register in the region, further highlighting the city’s determination to foster a thriving crypto ecosystem.
The HKMA’s push for major banks to embrace crypto exchanges as clients aligns with its vision to create a favourable environment for the growth and development of the crypto industry in Hong Kong. By encouraging banks to overcome their hesitations, the HKMA aims to facilitate a symbiotic relationship between the traditional banking sector and the emerging crypto economy.
