SNEAK PEEK

• Chinese banks show interest in backing Hong Kong’s crypto firms.
• Hong Kong plans to introduce regulations for crypto exchanges in June.
• China Liaison Office representatives attend Hong Kong crypto gatherings.

China’s state-owned banks have emerged as a potential source of support for the crypto industry in Hong Kong, which has been grappling with challenges arising from regulatory crackdowns and market volatility. 

Despite their historical skepticism towards cryptocurrencies, the banks have shown interest in backing crypto firms operating in Hong Kong, providing a much-needed boost to the beleaguered sector.

According to Bloomberg, several central Chinese banks now offer banking services to cryptocurrency companies in Hong Kong. The Bank of Communications, Bank of China, and Shanghai Pudong Development Bank are reportedly among those who have either already begun providing these services or have expressed interest in doing so.

As per the statement of an individual, a Chinese bank’s sales representatives have visited a cryptocurrency company’s office to promote their services at least once.

On the same accord, in October last year, the government of Hong Kong announced that it was considering introducing a bill to regulate cryptocurrency. This was followed up in February of this year when the Securities and Futures Commission (SFC) released a proposal for a regulatory regime for cryptocurrency exchanges. 

The proposed regulations are set to take effect in June of this year. Further, they will require cryptocurrency exchanges to obtain a license from the SFC and follow strict rules on compliance, risk management, and customer protection.

Per a report dated February 20th, representatives of the China Liaison Office have been participating in cryptocurrency gatherings held in Hong Kong. This indicates their interest in keeping up with the latest advancements in the crypto industry and seeking avenues to build connections with crypto firms.