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 as well. 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 Bank of Communications, a state-owned major bank in China, is collaborating with several cryptocurrency businesses registered in the city and is in talks to open accounts for more regulated businesses, according to a report published in Wall Street Journal.
Apart from the Bank of Communications, ZA Bank, Hong Kong’s largest virtual bank, controlled by Chinese internet insurer ZhongAn Online P&C Insurance Co., will together act as the settlement bank for the crypto companies. The banks will together facilitate the depositing and withdrawal of fiat currencies.
In addition to providing account services to cryptocurrency businesses, these banks will serve as settlement banks to enable token deposits at authorised exchanges to be withdrawn in Hong Kong dollars, Chinese yuan, and US dollars.
At the start of the year, Hong Kong’s financial secretary Paul Chan made it clear 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.
Related: Hong Kong’s crypto rules set a high bar for good reason
As Cointelegraph reported earlier, apart from onboarding crypto companies and opening bank accounts for regulated firms, the Chinese government-backed CPIC Investment Management launched two crypto funds. CPIC is the second-largest insurance firm in mainland China, and its newly launched crypto funds are focused on institutional investors
China’s growing interest in crypto via Hong Kong has surprised many in the crypto ecosystem as the country has carried out multiple crackdowns on crypto-related activities in mainland China .
Magazine: ZK-rollups are ‘the endgame’ for scaling blockchains: Polygon Miden founder