HKMA wants banks to serve crypto clients

The Hong Kong Monetary Authority (HKMA), acting as the central bank and regulator for the region, has reportedly exerted pressure on major banks such as HSBC and Standard Chartered to accept cryptocurrency exchanges as clients. Sources familiar with the matter revealed that in a May meeting, the HKMA questioned these UK-based institutions, as well as the Bank of China, about their reluctance to work with crypto exchanges.

Just a month prior, on April 27, the HKMA issued a circular to banking institutions urging them to pay attention to new market developments and adopt a more proactive approach towards sectors like the cryptocurrency market. The central bank specifically mandated that these institutions assist virtual asset service providers (crypto firms) in accessing banking services.

According to an insider familiar with the meeting, the HKMA encouraged the banks to overcome their apprehensions, although some senior executives at traditional banks remain resistant to taking on crypto clients.

This move by Hong Kong to pressure banks comes amidst a challenging regulatory environment for exchanges in the United States. The US Securities and Exchange Commission (SEC) recently sued Binance and Coinbase for alleged violations of domestic securities laws. Binance.US has expressed that the SEC’s lawsuit has strained its banking relationships in the US, while Binance Australia had to halt Australian dollar services after its ties with a local payments provider were severed.

Despite these challenges, some lawmakers in Hong Kong have shown a more welcoming attitude towards crypto firms. Legislative Council member Johnny Ng voiced his support for Coinbase on Twitter and even extended an invitation for the company to establish operations in Hong Kong, which recently implemented new crypto regulations allowing locally-licensed firms to operate and serve retail investors in cryptocurrency trading.

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