Hong Kong officials are summoning a meeting between cryptocurrency companies and banks in an effort to ease the financial burden on the industry. The roundtable discussion is scheduled to take place on April 28th at the Hong Kong Monetary Authority (HKMA) and aims to facilitate direct dialogue, share experiences, and practical viewpoints on opening and maintaining bank accounts.

The event is being hosted by HKMA and the Securities and Futures Commission (SFC), the two authorities responsible for managing and supervising stablecoins and crypto exchanges.

According to Bloomberg, the new meeting will provide a platform for crypto and banking industry leaders to discuss the challenges of operating in the digital asset space. The event comes after Hong Kong began to shift towards the cryptocurrency industry from last October, with plans to transform into a digital asset hub and a playground for Web3 companies.

Hong Kong will start allowing crypto trading from June 1st, although the new law will only apply to professional investors. Nevertheless, the move is seen as a significant step towards easing mainland China’s view on cryptocurrency and attracting capital inflows from across the Asian region.

Moreover, according to Bloomberg, many Chinese banks have proactively contacted crypto companies, continuing to send positive signals to the industry in the near future. This is a significant development as crypto companies have always faced difficulties connecting with traditional banking services, such as opening accounts for paying employee salaries.

The recent collapse of several US financial institutions has made it even more difficult for crypto companies to find banks to work with. HKMA and SFC representatives refused to comment on the meeting, but they stated that they are maintaining dialogue with all relevant parties.

The crypto industry has long faced challenges when it comes to banking, and this meeting could provide a platform for the industry to address these challenges and collaborate with the banking sector. It remains to be seen how the meeting will play out, but it is clear that Hong Kong is taking steps to embrace the digital asset industry and make the region a hub for the future of finance.

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Hong Kong, a city that has emerged as a major hub for the crypto industry, is witnessing a surprising development.

According to a report by Bloomberg, the Hong Kong arms of three Chinese state-owned banks, Bank of Communications Co., Bank of China Ltd., and Shanghai Pudong Development Bank, have started offering banking services to local crypto firms or have made inquiries about the field. Sales representatives from one Chinese bank even visited the office of a crypto company to pitch its services.

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This move by Chinese banks indicates that Hong Kong’s push to become a major digital asset center has the backing of Beijing, despite the fact that trading of crypto has been banned on the mainland for over a year. The report also suggests that Chinese banks have been directly reaching out to crypto businesses over the past few months, a clear indication of the sector’s growing importance.

The crypto industry has been facing several challenges in recent times, including regulatory crackdowns and restrictions on trading. However, the interest shown by Chinese banks in providing banking services to crypto firms could be a significant boost for the industry. Hong Kong’s pro-business environment and regulatory framework have already made it an attractive destination for crypto businesses.

The move by Chinese banks could also help bridge the gap between the crypto industry and traditional finance. Many banks have been reluctant to work with crypto firms due to regulatory uncertainties and concerns over the industry’s reputation. However, the interest shown by state-owned banks in Hong Kong could encourage other financial institutions to follow suit.

The Bloomberg report suggests that the Chinese banks’ move could also have broader implications for the crypto industry. If Chinese banks start offering banking services to crypto firms in Hong Kong, it could pave the way for similar developments in other jurisdictions. This could be a significant step towards the mainstream adoption of crypto.

In conclusion, the move by Chinese state-owned banks to court crypto firms in Hong Kong is a positive development for the industry. It indicates that the sector is gaining acceptance among traditional financial institutions, which could help bridge the gap between crypto and mainstream finance. The move could also have broader implications for the crypto industry and pave the way for further adoption of digital assets.

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Despite the Hong Kong government’s efforts to make the city a crypto asset hub, many cryptocurrency firms are still struggling to open local bank accounts. Even licensed crypto firms are finding it difficult to do so, especially after the closure of Silvergate Bank and Signature Bank, two of the world’s biggest crypto-friendly banks.

According to SCMP, banks in the city are not keen to serve them, and as a result, Hong Kong’s cryptocurrency-related companies are scrambling to find ideal banking partners around the world and in their home city.

Adrian Wang, the founder and CEO of digital asset management firm Metalpha, stated that quite a few crypto funds and firms are seeking to find local Hong Kong banking partners to do business with to prevent the SVB-style crisis from happening to them again. While digital asset regulations in the city have become friendly overall, Hong Kong banks still have stringent requirements when dealing with crypto businesses.

Current regulations for crypto assets in Hong Kong do not restrict local banks and financial institutions from working with businesses engaged in crypto-related activities. However, the Hong Kong Monetary Authority requires banks to perform due diligence and ongoing monitoring of these clients. For instance, if the customer is a crypto asset service provider (VASP), the bank will need to see if the VASP is licensed and assess its Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) controls.

As many VASPs are not currently licensed in Hong Kong nor registered for AML/CTF requirements, this poses a significant hurdle for many VASPs to open a bank account in Hong Kong. But even licensed crypto firms in Hong Kong face challenges, as they can also find it difficult to open bank accounts and often have very limited options.

Many Hong Kong firms are now hoping that local banks could expand their services and develop solutions fit for crypto companies, now that the government has set its mind to attract such businesses back to the city after a previous exodus. In October last year, Hong Kong unveiled a range of policies aimed at boosting its crypto asset sector and becoming a hub and proposed rules on legalizing retail crypto trading.

However, some industry players think such measures are not enough. There are already multiple ways for retail customers to buy crypto, and the real question is that there’s no proper, regulated, and convenient fiat on-ramp and off-ramp infrastructure in Hong Kong.

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This article was republished from azcoinnews.com