Hong Kong Started to Provide Banking Services to Cryptocurrency Companies

According to Bloomberg’s report, Hong Kong has started offering banking services to crypto companies. Although cryptocurrency trading has been banned on the mainland for over a year, Bloomberg has claimed that leading Chinese banks have started reaching out directly to cryptocurrency companies over the past few months. This is one of the most concrete signs that the city’s ambition to become a major cryptocurrency center has received support from the Beijing government.

According to sources, leading Chinese banks, including Bank of Communications, Bank of China and Shanghai Pudong Development Bank, have started to offer banking services to crypto companies through their Hong Kong branches, while those that have not started are examining the industry. Moreover, the allegations are not limited to this. Sources suggest that sales representatives of a major Chinese bank have visited the office of a cryptocurrency company at least once to offer banking services.

According to market watchers, this move from Chinese banks is valuable amid the liquidity crisis that emerged as the cryptocurrency industry was ostracized by major banks before and after the banking crisis that erupted in the US. In addition, after the US Silicon Valley Bank (SVB), Silvergate and Signature Bank bankruptcy, there are comments that Chinese banks want to seize the opportunity and that it is the most appropriate time to fill the gap.

Sung Min Cho, founder and CEO of beoble, a messaging system provider for decentralized applications (dApps), spoke to Bloomberg. Cho said that this move by Chinese banks means a lot to the industry because at this point, something like this would never be expected, even worldwide. A senior executive working at a branch of a large Chinese bank in Hong Kong, who did not want his name to be disclosed, underlined that Chinese banks’ starting to offer banking services to crypto money companies is the most visible green light from Beijing.

Hong Kong took action in October 2022 to help revitalize its struggling financial centre, and it was announced that it plans to legalize Bitcoin (BTC) and cryptocurrency trading, giving the first signal that it will open its doors to crypto companies. In December, another detail about Hong Kong’s plans for cryptocurrencies emerged, and it was announced that companies and exchanges providing crypto money services would be subject to money laundering and anti-terrorism financing laws applied to traditional financial companies. By February 2023, it was announced that Hong Kong plans to allow retail investors to buy/sell with cryptocurrencies. Immediately after this announcement, crypto money companies started to apply for licenses to operate in the country.