As the pressure from regulators mounts in the United States, crypto firms are looking for safe havens overseas. One of the most attractive destinations is Hong Kong, where Chinese banks are reportedly extending support to crypto firms. Even though China has banned crypto trading on the mainland, it is keen to make Hong Kong the crypto hub of Asia.
The Chinese banking sector has been reaching out to crypto businesses in Hong Kong in recent months. Bank of Communications Co., Bank of China Ltd., and Shanghai Pudong Development Bank are among the institutions that have offered banking services to local crypto firms or have made inquiries in the field.
A sales representative from one of these banks even visited the office of a crypto firm to pitch their services. According to a top executive from a big Chines crypto firm, this shows that the People’s Bank of China (PBOC) is gradually relaxing its stance on the crypto industry.
The recent news that Chinese lenders are now offering cryptocurrency accounts has been welcomed by the crypto industry. This move comes as a surprise, as the industry has been facing significant liquidity challenges amid regulatory developments in the US. Sung Min Cho, founder and CEO of beoble, has stated that the push by Chinese lenders “means a lot to us because it’s something you’d never expect at this point, even around the globe. A cryptocurrency account at a tradfi bank is something groundbreaking.”
Crypto firms have been struggling to find a way to bank with traditional firms. The anonymous nature and volatile behavior of crypto firms have been major red flags to traditional firms. However, Hong Kong-based virtual bank ZA Bank recently said that it is open to servicing crypto firms that pass regulatory and internal requirements. Devon Sin, CEO of ZA Bank, stated that the bank has opened a pilot program for express business account openings. Hong Kong may not be the only location where crypto firms are considering a mooring.
As the crypto industry continues to grow, Chinese banks are beginning to extend support to Hong Kong-based crypto firms. This may give the city an edge in becoming the leading crypto hub of Asia. However, traditional banks will need to overcome their reservations about the anonymous and volatile nature of crypto firms to provide more widespread support. It remains to be seen which destinations will emerge as the most attractive for crypto firms looking for safe havens, as the regulatory landscape in the US remains uncertain.