HKMA Urges Major Banks to Embrace Crypto Exchanges as Clients
The Hong Kong Monetary Authority (HKMA), acting as the region’s central bank and regulator, has reportedly exerted pressure on major financial institutions, including HSBC and Standard Chartered, to accept cryptocurrency exchanges as clients.
According to sources familiar with the matter, cited in a Financial Times report on June 15, the HKMA questioned these banks, along with the Bank of China, during a May meeting, inquiring why they were hesitant to engage with cryptocurrency exchanges.
Less than a month before the meeting, on April 27, the HKMA issued a circular to banking institutions urging them to stay abreast of new market developments and adopt a more proactive approach towards emerging sectors, such as the crypto market.
The circular specifically mandated Hong Kong’s banks to facilitate access to banking services for virtual asset service providers (VASPs), which are crypto firms, according to the central bank’s document.
An insider familiar with the meeting’s content revealed that the HKMA “encouraged the banks to not be afraid,” although there is resistance from some senior executives within traditional banks who are opposed to onboarding crypto clients.
On June 1, Hong Kong introduced a new set of crypto regulations that allowed locally-licensed crypto firms to commence operations. With valid licenses, these firms can now serve retail investors and facilitate the trading of cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH).