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Hong Kong's financial supervisory body, the Hong Kong Monetary Authority (HKMA), is encouraging major global banks to dive into the world of cryptocurrencies, according to a recent report. HSBC, Standard Chartered, and Bank of China are the primary targets as the HKMA urges these top financial institutions to provide banking services to cryptocurrency exchanges.
The story began in April when the HKMA approached these banking giants, urging them to stay informed about market trends and adopt a proactive stance toward emerging sectors, including cryptocurrencies. In order to ensure that the crypto industry has access to financial services, the Hong Kong central bank made a special request to these institutions, emphasizing the need to extend their services to "virtual asset service providers."
This notable push by the HKMA comes at a challenging time for crypto exchanges, particularly in the United States. Both Binance and Coinbase, two major crypto exchanges, faced lawsuits alleging violations of domestic securities laws. The U.S. Securities and Exchange Commission (SEC) filed lawsuits against Binance on June 5 and Coinbase on June 6.
These legal actions have strained Binance's relationships with its U.S. banking partners, leading to limitations on deposits and withdrawals after local payment facilitator Zepto severed its banking connections. In contrast, Hong Kong appears to be extending a welcoming hand to crypto enterprises. Johnny Ng, a member of the Hong Kong Legislative Council, openly supported Coinbase and invited the troubled firm to consider relocating to Hong Kong's crypto-friendly environment.
This political support coincides with the introduction of new crypto regulations by Hong Kong on June 1, allowing locally licensed crypto firms to commence their operations. These new rules enable any firm holding a valid license to offer retail investors the opportunity to trade cryptocurrencies, including the popular Bitcoin.
