As the industry has been ignored by traditional banks, obtaining basic financial services like establishing an account to pay employees and suppliers has been tough.
- Chinese banks have been reaching out to crypto firms directly over the last few months.
- The timing is perfect since the collapse of three major US technology banks.
Chinese state-owned banks have emerged as an unexpected source of possible support for the influx of cryptocurrency businesses into Hong Kong after the city granted access to the beaten-down industry.
Moreover, Chinese banks have been reaching out to crypto firms directly over the last few months, adding to indications that Beijing supports the city’s bid to become a major digital asset hub despite the fact that crypto trading has been illegal on the mainland for over a year.
According to those in the know, the Hong Kong branches of the Bank of Communications, Bank of China, and Shanghai Pudong Development Bank have all begun providing banking services to local crypto companies.
Both Parties Benefitting
One source claims that salespeople from a Chinese bank have made a personal appearance at the headquarters of a cryptocurrency firm to promote the bank’s offerings.
As the industry has been ignored by traditional banks, obtaining basic financial services like establishing an account to pay employees and suppliers has been tough. In addition, the timing is perfect since the collapse of three major US technology banks—Silicon Valley Bank, Silvergate Capital, and Signature Bank—leaves a hole that the lenders are well-positioned to fill.
There has never been a convenient banking system for crypto companies. Traditional banks, which adhere to know-your-client (KYC) standards as a matter of course, have been alarmed by its anonymity.
Despite this, the consensus is that Hong Kong banks are more receptive to crypto firms now than they were a few years ago. However, this is unlikely to be a game-changing development so long as know-your-customer (KYC) and anti-money laundering (AML) regulations remain a mainstay in the financial world.