Hong Kong’s push to become a crypto hub has opened an opportunity for not just crypto companies but many state-affiliated banks in China. The Chinese banks have shown interest in building partnerships and onboarding regulated crypto companies in Hong Kong, despite a blanket bank on crypto-related activities in mainland China.
The Hong Kong arm of the major Chinese state-owned Bank of Communications is collaborating with several cryptocurrency businesses registered in the city. The bank is in talks to open accounts for regulated companies, according to a report published in The Wall Street Journal.
In addition to the Bank of Communications, ZA Bank — Hong Kong’s largest virtual bank controlled by Chinese internet insurer ZhongAn Online P&C Insurance — will also act as the settlement bank for the crypto companies. The banks will together facilitate the depositing and withdrawal of fiat currencies.
Along with providing account services to cryptocurrency businesses, these banks will serve as settlement banks to enable token deposit at authorized exchanges to be withdrawn in Hong Kong dollars, Chinese yuan and U.S. dollars.
At the start of the year, Hong Kong’s financial secretary Paul Chan clarified that the city is pushing to collaborate with more crypto firms in 2023. As a result of the government’s progressive crypto approach, nearly 80 cryptocurrency firms have shown interest in opening or expanding their business in the city. The government’s crypto push has attracted some surprising allies in the form of Chinese banks and funds.