- Hong Kong banks encouraged to serve crypto companies
- HKMA urges risk-based approach to account applications
- Regulatory clarity aims to attract crypto businesses
Hong Kong is paving the way for a thriving crypto industry as its de facto central bank, the Hong Kong Monetary Authority (HKMA), encourages banks to offer services to virtual asset companies. As more countries begin to embrace the benefits and technology brought by the crypto space, Hong Kong aims to position itself as a leading hub for the rapidly growing sector.
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Deputy Chief Executive of HKMA, Arthur Yuen, recently clarified that there is no legal or regulatory requirement preventing Hong Kong banks from providing services to virtual asset (VA) entities. This statement comes in response to concerns raised by crypto companies about the challenges they face in opening bank accounts in the jurisdiction.
To maintain compliance and mitigate risk, Yuen advises banks to adopt a “risk-based approach” when conducting due diligence on account opening applications. He further warns against using a one-size-fits-all method when evaluating crypto businesses, as this may hinder their growth and innovation.
While acknowledging the higher anti-money laundering risks presented by some virtual businesses, Yuen also recognizes that banking staff may lack experience in dealing with emerging markets. As a result, they may be turning away potential customers in order to avoid complications.
In an effort to attract more crypto companies and foster a vibrant virtual asset ecosystem, Hong Kong has been working towards providing regulatory clarity for virtual asset services providers. A recent circular released by the regulator outlines best practices for banks offering services to the crypto industry.
As the global financial landscape continues to shift, Hong Kong’s proactive approach towards crypto businesses signifies a growing recognition of the pivotal role cryptocurrencies will play in the future of finance.
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