Hong Kong Monetary Authority Puts Major Banks on the Spot: Why?

In a shocking development, Hong Kong’s central bank has turned its attention to major financial institutions operating within its jurisdictions.

According to the report, Hong Kong’s authority is mounting pressure on theses, including HSBC, and Standard Chartered, seeking an explanation for their reluctance to accept crypto exchanges as clients.

This development raises curiosity as it involves traditional banks and the crypto industry, which seems to be gaining growing interest and attention.

HK Govt Urges Banks to Support Licensed Crypto Exchange, Report

Reportedly, major banks, including Standard Chartered and HSBC, have been receiving pressure from the Hong Kong Monetary Authority (HKMA), an institute meant to promote financial stability.

As reported by the Financial Times on June 15, the Hong Kong Monetary Authority held a meeting in May with both Bank of China and U.K.-based firms discussing why they’re not accepting crypto exchanges as clients.

Prior to the reported meeting in April, the HKMA had already taken a proactive step in issuing a circular to banking institutions.

This circular urged the banks to pay attention to new market developments and adopt a more progressive approach towards emerging sectors like the crypto market.

According to the document, Hong Kong’s authority explicitly asked the banks to provide support to crypto firms (virtual asset service providers) in accessing banking services.

This directive indicated the HKMA’s intention to foster a more inclusive financial environment by encouraging banking institutes to engage with crypto-related businesses. While prominent crypto exchanges face tough regulatory challenges, Hong Kong’s authorities support crypto.

Hong Kong Legislative Council member Johnny Ng recently expressed his support for Coinbase, a top crypto firm facing SEC challenges.

Johnny Ng took to his Twitter, not only voicing his backing but also extending an invitation for Coinbase to establish operations in a more favorable environment.

“Please feel free to approach me, and I am happy to provide any assistance,” He added.

Hong Kong Set to Grant Crypto Exchange Access to Retail Users

In a bid to establish itself as a prominent digital asset hub, Hong Kong is moving forward with plans to allow retail investors to trade cryptocurrencies. 

Despite ongoing clashes between the industry and regulators in other Asian jurisdictions, the city’s SFC recently announced the outcomes of a consultation on retail participation in the crypto sector.

According to Bloomberg, under the SFC’s new rulebook, individual investors can buy and sell major cryptocurrencies such as Bitcoin and Ether. 

This development coincides with the launch of a new licensing regime for virtual-asset platforms. Hong Kong aims to enhance and create a more crypto-friendly environment by granting access to retail investors.