Hong Kong’s Monetary Authority (HKMA), the central bank and regulator of the region, is reportedly urging major banks like HSBC and Standard Chartered to reconsider their reluctance to accept cryptocurrency exchanges as clients.
According to a report by Financial Times on June 15, 2023, sources familiar with the matter revealed that during a meeting in May, the HKMA questioned these banks, as well as the Bank of China, about their stance on cryptocurrency exchanges.
This push from the HKMA follows a circular issued to banking institutions on April 27, 2023, urging them to adopt a more proactive approach towards emerging sectors like the cryptocurrency market and stay informed about market developments. The HKMA specifically emphasized the importance of assisting cryptocurrency companies, referred to as “virtual asset service providers,” in accessing banking services.
Notably, Hong Kong enacted new cryptocurrency legislation on June 1, 2023, enabling locally licensed crypto businesses to begin operating in the region. The new regulations allow licensed businesses to provide services to retail investors and facilitate the exchange of cryptocurrencies like Bitcoin and Ether.
While major banks in Hong Kong face pressure from the HKMA to reconsider their stance on cryptocurrency exchanges, the region’s more supportive regulatory landscape offers significant opportunities for the growth and development of the cryptocurrency industry. Hong Kong’s bold approach toward digital assets stands in contrast to the uncertainties surrounding exchanges in the United States.
The U.S. Securities and Exchange Commission (SEC) recently filed lawsuits against exchanges like Binance and Coinbase for alleged violations of domestic securities laws. However, Hong Kong authorities appear to be receptive to such companies. On June 10, 2023, Johnny Ng, a member of the Hong Kong Legislative Council, expressed his backing for Coinbase via Twitter, even inviting the troubled cryptocurrency firm to operate in a more accommodating environment.
I hereby offer an invitation to welcome all global virtual asset trading operators including @coinbase to come to HK for application of official trading platforms and further development plans. Please feel free to approach me and I am happy to provide any assistance. pic.twitter.com/bcIi1IjMlc
— Johnny Ng 吴杰庄 (@Johnny_nkc) June 10, 2023
Furthermore, it has been reported that the Hong Kong’s financial regulators plan to establish comprehensive regulations for the stablecoin market by the end of 2024. In move toward that goal, the Hong Kong Monetary Authority (HKMA) recently conducted a public consultation to gather opinions and suggestions regarding stablecoin rules. The consultation primarily focused on key topics such as stablecoin issuance, governance, and stability.
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