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On March 28, an important development took place in the world of crypto and banking.
According to Bloomberg, the Hong Kong Monetary Authority (HKMA) has revealed that it plans to hold a meeting on April 28 with local crypto firms and banks. During the talks, problems and challenges in opening and maintaining bank accounts will be discussed, and dialogue between the two sectors will be facilitated.
As we stated in a recent article, the recent turmoil in the banking sector is a challenge that can be turned into an opportunity with the right approach.
As we noted in that section: “[…] We continue to maintain that banks can safely bank on crypto-asset businesses using sensible risk management approaches, and indeed, de-risking the crypto sector exacerbates risks by concentrating risks while hindering innovation.”
Indeed, the latest update from Bloomberg suggests that Hong Kong regulators intend to ease financing for the sector in these upcoming negotiations. It comes as the city makes further moves into the crypto space.
In the making
Last month, we reported on the news that Hong Kong had released a long-awaited consultation on a proposed regulatory framework for cryptoassets, which many observers believe could re-establish it as a leading hub for crypto innovation.
On February 20, Hong Kong’s Securities and Futures Commission (SFC) issued a massive 361-page consultation document setting out the intended framework for the supervision of cryptocurrency trading platforms.
The proposed framework – due to come into force on 1 June – seeks to provide the SFC with a comprehensive supervisory framework, given that until now the SFC has been limited to administering an optional licensing regime for virtual asset trading platforms that offer trading with at least one asset that qualifies as a security.
However, the recent collapse of several cryptocurrency-related banks has created problems for some firms to access banking services. Still, state-owned lenders in China have recently stepped up in the crypto sector, despite the country banning most cryptocurrency-related activities.
Meanwhile, Hong Kong’s moves are a welcome step in the right direction at a time when crypto-banking relations are under strain.
Financial Services APAC Regulators and Government
