Hong Kong is striving to establish itself as the crypto hub of Asia, but top banks such as Standard Chartered and HSBC appear reluctant to join the movement. According to a recent report from the Financial Times, the Hong Kong Monetary Authority (HKMA) has been pressuring these major lenders to take on crypto exchanges as clients. The HKMA even questioned the two UK-based banks, along with the Bank of China, about why they were unwilling to accept crypto clients.
In a letter dated April 27, the HKMA reminded banks that due diligence on crypto firms should not create an undue burden, particularly for those setting up offices in Hong Kong to capitalize on the emerging opportunities. Nonetheless, the fear of prosecution if their crypto clients engage in money laundering or other illegal activities keeps the banks hesitant to serve them. This reluctance could, in turn, hinder Hong Kong’s push to become a global center for cryptocurrencies.
A source familiar with the matter explained that the HKMA encouraged banks not to be afraid, but resistance from a conventional banking mindset still exists among senior executives at traditional banks.
Coincidentally, the Hong Kong legislator invited Coinbase to set up a base in the region just last week, following a lawsuit filed by the US SEC against the crypto exchange for violating federal securities laws. This invitation puts banking institutions in a critical position. A senior executive at one of the banks noted that they must walk a fine line between supporting crypto and exchanges, and being cautious of the US situation.
Banks are caught between wanting to ensure the development of the crypto industry if it aligns with the Hong Kong government’s policy, and worrying about potential consequences related to anti-money laundering or know-your-customer issues.
It’s worth mentioning that this content may include the personal opinion of the author and is subject to market conditions. It is essential to conduct your market research before investing in cryptocurrencies, as neither the author nor the publication holds any responsibility for your personal financial loss.
Source: Coingape
