Hong Kong’s banking regulator is urging banks such as HSBC and Standard Chartered to accept cryptocurrency exchanges as clients, despite increased scrutiny from US regulators. Here’s what it might mean for cryptocurrencies like Polygon (MATIC), Cardano (ADA), and Caged Beasts (BEASTS).
What Is The Background On Hong Kong And Cryptocurrency?
Hong Kong aims to regain its status as a crypto hub and announced in October its intention to create a facilitating environment for digital asset groups.
During a recent meeting, the Hong Kong Monetary Authority questioned these UK-based banks, as well as Bank of China, about their reluctance to work with crypto exchanges, according to three sources familiar with the matter.
The HKMA, in an April 27 letter seen by the Financial Times, emphasized that due diligence on potential customers should not impose an excessive burden, especially for those seeking opportunities by establishing offices in Hong Kong. While there is no ban on banks serving crypto clients, they are hesitant to engage with exchanges due to concerns about potential money laundering or illegal activities.
This pressure highlights the challenges faced by Hong Kong as it strives to become a global hub for the crypto industry, despite recent high-profile collapses like FTX. One source knowledgeable about the discussion stated that the HKMA encouraged banks to overcome their apprehensions, but there is resistance from traditional bank executives who hold a conventional mindset.
Historically, Hong Kong has been a prominent center for cryptocurrencies, hosting FTX exchange (then relocated to the Bahamas, and now partially shut), stablecoin Tether, and digital assets exchange Crypto.com. Its position was weakened after Beijing initiated a crackdown on cryptocurrencies in 2017.
Hong Kong Is Now Pushing For Relaxed Crypto Laws
HSBC, Standard Chartered, and Bank of China hold special roles in Hong Kong as issuers of the city’s currency and have prominent positions in the Hong Kong Association of Banks. Standard Chartered mentioned engaging in regular dialogue with regulators on various topics, while HSBC stated its active involvement in the policies and developments of the nascent industry in Hong Kong.
To attract more crypto businesses, Hong Kong recently implemented a new licensing framework for crypto platforms. Neil Tan, Chair of the FinTech Association of Hong Kong, stated that the government has taken all necessary steps to encourage banks to offer banking services to the crypto sector.
Should Hong Kong be successful in urging banks to adopt a more liberal attitude towards cryptocurrency, this would create immense benefits for established cryptocurrencies such as Cardano and Polygon. This is for two reasons. The first is that Hong Kong is considered to be a fintech hub, something of a citadel for tech startups and businesses. For those investing in ADA or MATIC, Hong Kong would represent a major market to expand the reach of their respective platforms and increase their own earnings due to the undeniable interest there would be for these tokens.
The second is that Hong Kong serves as a gateway to mainland China and allows for businesses to be conducted through interactions with the vast Chinese market. Given the innovative nature of both Polygon and Cardano, as they seek to develop and evolve their ecosystems to be adaptive for different markets, the opportunity of business with mainland China presents a unique opportunity and underlines the potential of being able to resurrect Hong Kong as the center of its activities.
Hong Kong Is Perfect For A New Crypto Like Caged Beasts Too
As mentioned above, Hong Kong is home to many startups, which is exactly what Caged Beasts is in the crypto context. As a new coin currently embarking on a presale, it needs major funding during its presale to initiate a successful launch into the market. The opportunity of working in Hong Kong with banks would present it with a golden opportunity to secure much-needed funding for its fledgling project and establish it with enough footing to build itself in the market.
And given Hong Kong’s innovative nature as a city for startups, Caged Beasts would find itself at home being able to seduce investors looking to diversify their crypto portfolios.
Right now, Caged Beasts is offering a referral program that offers a mutually-rewarding outcome to both those who provide the platform to others and those signing up to Caged Beasts through it. As an exciting meme coin, it could do wonders should Hong Kong be successful in its push to make banks work with crypto.
Caged Beasts
Website: https://cagedbeasts.com
Twitter: https://twitter.com/CAGED_BEASTS
Telegram: https://t.me/CAGEDBEASTS
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