In September 2022, mainland China decided to ban crypto transactions. After this decision banks faced many difficulties in their operations but now some positive news is coming out as over 80 companies are trying to explore their business in Hong Kong.
A few days back, Christopher Hui, the secretary of Financial Services and Treasury informed us that over 80 foreign and mainland Chinese entities have shown their interest in establishing a Web3 company in Hong Kong. According to reports two banks, Bank of China Limited and Shanghai Pudong Development Bank have already started to provide their services to the local crypto firms.
In February 2023 Hong Kong presented a detailed crypto regulation in front of stakeholders to discuss and provide suggestions. After analysis of every aspect and the suggestions provided by the public, the new rules will come into effect from 1 June.
The move of Chinese state-owned banks to enter the Hong Kong market will facilitate local crypto firms as they can now set up their corporate account in the banks. It will also boost the digital assets management in the country. Hong Kong decided to take a different approach towards cryptocurrencies in October 2022 release after China banned crypto trading in September.
The country has distinguished itself from mainland China in terms of managing cryptocurrency trading and decided to explore the possibilities of success in this sector. Chinese banks are very eager to enter Hong Kong because of restrictions on trade in China.
Hong Kong is trying to become a global financial hub in digital assets through decentralized blockchains. After the decision of mainland Chinese entities to set up their business in the city, the dream to become a global financial hub seems to be turning into reality. In February Hong Kong set aside HK$50 million (US$6.37 million) to provide the necessary infrastructure to facilitate these investments.