Hong Kong Crypto Firms Gain Surprising Support From Chinese Banks: Report

Crypto firms moving to Hong Kong amid the region’s upcoming licensing regime for crypto exchanges are gaining surprising support from mainland China state-owned banks.

According to a Monday report by Bloomberg that cited people with knowledge of the matter, some Chinese banks have been “directly reaching out” to crypto firms over the past few months despite mainland China’s blanket ban on crypto trading since 2021.

Chinese Banks Offer Services to HK Crypto Firms

The report said the Hong Kong arms of Bank of Communications Co., Bank of China Ltd., and Shanghai Pudong Development Bank have either started offering banking services to local crypto firms or made inquiries to them. The report added that sales representatives from one Chinese bank even visited the office of a crypto firm to pitch its services.

The support from 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,” said Sung Min Cho, founder and chief executive of beoble, a provider of a messaging system for decentralized applications.

Beijing Quietly Backs HK Crypto Plans

The latest move adds to signs that Hong Kong’s crypto hub ambition has backing from Beijing, despite crypto trading activities being banned in mainland China. Bloomberg previously reported that Hong Kong’s crypto push was receiving low-key support from Beijing.

It was revealed by Bloomberg that representatives from China’s Liaison Office and other officials have been frequent guests at Hong Kong’s crypto gatherings over the past months, exchanging business cards and WeChat details.

An executive of a major Chinese bank branch in Hong Kong said the crypto push and the support from Beijing, and the “uncertain local lending situation has offered an opportunity to explore the market.”

Last month, Hong Kong’s Securities and Futures Commission (SFC) released a consultation paper, proposing new measures that could allow licensed crypto exchanges to offer services to retail investors in the region.

The move is part of an effort to allow retail crypto trading under Hong Kong’s new licensing regime for crypto exchanges, which will take effect on June 1.