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Amid the recent regulatory actions in the US, crypto firms are looking for overseas safe havens with Hong Kong emerging as the most-friendly destination. Yet another report suggests that banks from the Chinese mainland have been extending help to crypto firms in Hong Kong.
Last month, we reported that representatives from China have been making frequent visits to Hong Kong. The latest Bloomberg report shows that Chinese banks have directly reached out to crypto businesses over the past few months.
Even though China has banned the trading of crypto in the mainland, it seeks to make Hong Kong the crypto hub of Asia. The recent banking crisis and the regulatory action in the US have forced banks to cut down on servicing crypto firms. This could be an opportune time for Hong Kong to attract more crypto firms looking for crypto-friendly destinations.
Citing sources familiar with the matter, Bloomberg reported that “the Hong Kong arms of Bank of Communications Co., Bank of China Ltd. and Shanghai Pudong Development Bank have either started offering banking services to local crypto firms or have made inquiries to the field”.
One of the sources also added that a sales representative from one of these banks has also visited the office of a crypto firm to pitch their services. A top executive from a big Chinese bank operating in Hong Kong said that the crypto push has a green light from Beijing.
Industry Welcomes the Move of Chinese Banks in Hong Kong
Crypto Industry players have welcomed this development as they have been facing major liquidity challenges amid the developments in the US. Sung Min Cho, founder and chief executive of beoble told Bloomberg:
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.”
However, banking with crypto firms is easier said than done. The anonymous nature and volatile behavior of crypto firms have been a major red flag to traditional firms.
Hong Kong-based virtual bank ZA Bank recently said that they are open to servicing crypto firms that pass the regulatory and internal requirements. Devon Sin, CEO of ZA Bank said that they have opened a pilot program for express business account openings.
However, Hong Kong is not the only place where crypto firms are eyeing a move. Several firms have also turned to Swiss banks amid the recent fallout in the US baking sector.
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