Hong Kong’s Monetary Authority has urged banks in the city-state to offer services to virtual asset service providers (VASPs) as part of its efforts to establish itself as a premier digital asset destination on a global scale. The HKMA, in a blog post, urged banks to seize emerging opportunities, such as digital assets, to aid the state’s economic recovery from the pandemic.
The HKMA has been discussing with commercial banks the difficulties VASPs face in opening a bank account in the state. Although banking regulators around the world have not forbidden banks from providing services to VASPs, many banks have blackballed the industry, burying them in mountains of documents that take months to review.
The HKMA has reminded banks that no legal and regulatory requirement prohibits them from providing banking services to VA-related entities. The central bank has called on banks to adopt a risk-based approach and to judge every customer’s needs and risk profile independently.
The opening of an account should entail procedures and requirements that are “transparent, reasonable, and efficient.”
Deputy Chief Executive Arthur Yuen has signed a circular in which the HKMA has requested banks to establish dedicated teams and provide training to handle customers dealing in Bitcoin. The circular also appeals to banks to facilitate VASPs with “legitimate requirements for bank accounts.”
Hong Kong is positioning itself as a top global digital asset destination and is friendlier than most digital assets, with most banks in the city-state serving VASPs. Chinese banks operating in the state are also participating in this trend. The Bank of China, which is the second-largest bank in China, has allegedly provided services to VASPs. Other banks, such as the Bank of Communications, the fifth-largest bank in China, and the Shanghai Pudong Development Bank, have also been exploring this industry.
