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Hong Kong Monetary Authority Pressures Banks Into Servicing Digital Asset Exchanges


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Alex Lari

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The Financial Times reported on Thursday that the Hong Kong Monetary Authority (HKMA) is urging HSBC, Standard Chartered, and Bank of China to accept digital asset exchanges as their clients.

According to the FT, a letter from the Hong Kong Monetary Authority (HKMA) to banks on April 27 stated that conducting due diligence on potential customers should not “create undue burden,” especially for those establishing offices in Hong Kong to explore local opportunities.

Hong Kong Monetary Authority letter

In its pursuit to establish itself as a prominent global digital assets hub, Hong Kong has recently implemented significant measures.

Related reading : Is China About To Change Its Stance On Bitcoin ?

Starting from June 1, the Securities and Futures Commission (SFC) of Hong Kong started accepting applications for licenses from digital assets trading platforms. Furthermore, a Hong Kong lawmaker extended an invitation to Coinbase, urging them to register in the region.

These developments in Hong Kong align with the ongoing lawsuits faced by the world’s largest digital asset exchanges, Binance and Coinbase, by regulators in the United States.

Related reading : Regulatory “Siege” Underway For U.S. Exchanges — Warns Ex-SEC Official

During a meeting last month, the Hong Kong Monetary Authority (HKMA) inquired why HSBC and Standard Chartered, both based in the U.K., as well as Bank of China, were not accepting digital assets exchanges as their clients, as reported by the Financial Times. These three banks rank among the largest globally, as well as Bank of China, which is predominantly owned by the Chinese government.

Per the FT, the HKMA encouraged banks to overcome any fears they may have had. The report highlighted that there is resistance stemming from a traditional banking mindset, and some senior executives at conventional banks are displaying resistance.

The deputy chief executive at HKMA emphasized that, with the introduction of new regulations, banks in Hong Kong should strive to fulfill the legitimate business requirements of licensed Virtual Asset Service Providers (VASPs) and offer the necessary banking services.

Furthermore, he stated that the HKMA consistently emphasizes the importance of banks adopting a risk-based approach to manage the risks associated with individual customers.

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