• Hong Kong’s regulator HKMA is reportedly pushing global banks to accept crypto exchanges as clients.
• The banks include UK-based HSBC and Standard Chartered, and the Bank of China.
• This push comes at a time when US is cracking down on crypto exchange platforms with lawsuits against Binance and Coinbase for allegedly violating securities laws.
Hong Kong Regulator Pushes Global Banks to Onboard Crypto Exchanges
The Hong Kong Monetary Authority (HKMA), the body that regulates banks in the region, is reportedly pushing global banks operating in its jurisdiction toward accepting crypto exchange platforms as clients. Last month, the HKMA asked blue-chip institutions such as HSBC and Standard Chartered, and the Bank of China why they were not accepting crypto exchanges as clients. Furthermore, in a letter sent to the banks on April 27, the HKMA said that the lenders should not “create an undue burden for those setting up an office in Hong Kong.”
US Cracking Down on Crypto Exchange Platforms
This push from Hong Kong comes at a time when US is cracking down on crypto exchange platforms with lawsuits against Binance and Coinbase for allegedly violating securities laws. The SEC deemed numerous crypto assets as securities, including Binance’s native token BNB, thus accusing the crypto exchanges of selling unregistered securities.
Implications of Regulatory Action
These regulatory actions have implications for how digital asset companies operate in different jurisdictions around the world. They may also impact how traditional financial institutions view digital assets like cryptocurrencies going forward.
Hong Kong Establishing Itself As Digital Asset Hub
Hong Kong’s efforts to establish itself as a global hub for digital assets could be seen positively by some digital asset companies looking to grow their business presence in Asia given its proximity to mainland China. Additionally, if other jurisdictions follow suit then more banking services could become available for these companies around the world which would further propel innovation in this space forward.
Though there are still many regulatory hurdles ahead with regards to onboarding digital asset companies into traditional finance infrastructure globally, it seems that some regulators are beginning to recognize their potential benefits and actively take steps towards nurturing this sector which could mean good news going forward for all stakeholders involved in this space.