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<p><strong>Hong Kong is making <a href="https://walletinvestor.com/magazine/hong-kong-allows-crypto-exchanges-but-with-restrictions" target="_blank" rel="noopener">huge strides</a> to become the main hub for the crypto world, but the local banks have their doubts.</strong></p>
<h2 style="text-align: center;" id="under-pressure">Under Pressure</h2>
<p>HSBC and Standard Chartered, two UK-based lenders, are facing <a href="https://cointelegraph.com/news/hong-kong-government-pressures-bank-giants-accept-crypto-clients" target="_blank" rel="noopener">pressure</a> from Hong Kong&#8217;s banking regulator to accept crypto exchanges as clients. The Hong Kong Monetary Authority (HKMA) questioned these banks, along with the Bank of China, on why they were not accepting crypto exchanges as clients.</p>
<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">The Hong Kong Monetary Authority said due diligence should not &#8216;create undue burden&#8217; on potential customers <a href="https://t.co/PPNO2dYnaC">https://t.co/PPNO2dYnaC</a> <a href="https://t.co/nj6UbdDj4h">pic.twitter.com/nj6UbdDj4h</a></p>
<p>— Financial Times (@FinancialTimes) <a href="https://twitter.com/FinancialTimes/status/1669156968328577025?ref_src=twsrc%5Etfw">June 15, 2023</a></p></blockquote>
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<h2 style="text-align: center;" id="background">Background</h2>
<p>Hong Kong&#8217;s push for banks to accept crypto clients comes at a time when countries like the US are cracking down on crypto exchanges. The US affiliate of Binance, a major crypto exchange, halted dollar deposits after the Securities and Exchange Commission (SEC) asked a court to freeze its assets.</p>
<h2 style="text-align: center;" id="hkma-8217-s-request-to-banks">HKMA&#8217;s Request to Banks</h2>
<p>The HKMA sent a letter to lenders on April 27, stating that due diligence on potential customers should not create an undue burden, especially for those establishing offices in Hong Kong. The authority emphasized the need for banks to adopt a more ambitious approach to new sectors such as the crypto market and support virtual asset service providers in gaining access to banking services.<br />
Although the HKMA encouraged banks to embrace crypto clients, there is resistance from senior executives at traditional banks. Some are hesitant to onboard crypto exchanges as clients.</p>
<h2 style="text-align: center;" id="regulatory-environment">Regulatory Environment</h2>
<p>The regulatory environment for crypto exchanges is turbulent, particularly in the United States. The SEC has sued both Binance and Coinbase for alleged violations of securities laws. Binance.US stated that the SEC&#8217;s lawsuit has put pressure on its relationships with banking partners. Binance Australia also had to suspend Australian dollar services after its banking ties were severed.</p>
<h2 style="text-align: center;" id="hong-kong-8217-s-stance">Hong Kong&#8217;s Stance</h2>
<p>While some senior executives are resistant, lawmakers in Hong Kong are more welcoming towards crypto firms. A member of the Hong Kong Legislative Council expressed support for Coinbase and invited the company to establish operations in Hong Kong. On June 1, Hong Kong enacted new crypto regulations, allowing locally-licensed firms to operate and provide services to retail investors.</p>
<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">What are these new regulations, what do they mean, and how will they affect the crypto companies wishing to relocate to Hong Kong?</p>
<p>We break it all down ⬇️<a href="https://t.co/dUsKUl1MKh">https://t.co/dUsKUl1MKh</a></p>
<p>— nft now (@nftnow) <a href="https://twitter.com/nftnow/status/1669098643066871808?ref_src=twsrc%5Etfw">June 14, 2023</a></p></blockquote>
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<h2 style="text-align: center;" id="conclusion">Conclusion</h2>
<p>HSBC and Standard Chartered are under pressure from Hong Kong&#8217;s banking regulator to accept crypto exchanges as clients. This push aligns with the changing regulatory landscape, where countries like the US are imposing stricter regulations on crypto exchanges. While some traditional banks are resistant, lawmakers in Hong Kong are more open to crypto firms, and the city has implemented new regulations to support the industry.</p>

Hong Kong Government Pressures Banks to Accept Crypto Clients

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