As regulatory pressure mounts in the US, crypto firms are seeking safe havens overseas. A recent report by Bloomberg suggests that Chinese banks are extending support to crypto firms in Hong Kong. Although China has banned crypto trading on the mainland, it is keen to make Hong Kong the crypto hub of Asia.
This is creating a lot of interest in Hong Kong as a destination for crypto firms. Many believe that it could become the leading center for crypto trading in Asia. The support of Chinese banks is a major boost for the crypto industry in Hong Kong.
Directly reaching out to crypto businesses in Hong Kong, Chinese banks including Bank of Communications Co., Bank of China Ltd., and Shanghai Pudong Development Bank have been offering banking services or making inquiries in the field over the past few months.
A sales representative from one of these banks even visited the office of a crypto firm to pitch their services. According to a top executive from a big Chinese bank, the institution is currently exploring the possibility of issuing its own digital token.
The recent move by Chinese lenders to offer cryptocurrency accounts has been welcomed by the crypto industry, which has been facing significant liquidity challenges amid regulatory developments in the US. Sung Min Cho, founder and CEO of beoble, has stated that the push by Chinese lenders “means a lot to us because it’s something you’d never expect at this point, even around the globe. A cryptocurrency account at a tradfi bank is something groundbreaking.”
Crypto firms have been struggling to find a way to bank with traditional firms. The anonymous nature and volatile behavior of crypto firms have been major red flags to traditional firms.
Hong Kong-based virtual bank ZA Bank recently said that it is open to servicing crypto firms that pass regulatory and internal requirements. Devon Sin, CEO of ZA Bank, stated that the bank has opened a pilot program for express business account openings. Hong Kong may not be the only location where crypto firms are considering a mooring.
In conclusion, Chinese banks extending support to Hong Kong-based crypto firms may give the city an edge in becoming the leading crypto hub of Asia. However, traditional banks will need to overcome their reservations about the anonymous and volatile nature of crypto firms to provide more widespread support. This may be a challenge, as the regulatory landscape in the US remains uncertain, making it difficult to determine which destinations will emerge as the most attractive for crypto firms looking for safe havens.