Hong Kong Urges Banks to Take on Digital Asset Clients as US Crypto Woes Mount

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One man's meat is another man's poison. In this case, the US's hate for crypto is only fueling Hong Kong's embrace of it.

During a meeting last month, the Hong Kong Monetary Authority (HKMA) questioned its own banks including HSBC and Standard Chartered on why they were not accepting crypto exchanges as customers.

The HKMA added that due diligence on these clients should “create undue burden,” particularly “for those setting up an office in Hong Kong to look for the opportunities here.”

Of course, with crypto comes great risk. Just ask the SEC. Consequently, banks in Hong Kong have been reluctant to work with crypto clients due to concerns about money laundering and illegal activities.

Standard Chartered said it has engaged with the industry and had “regular dialogue with our regulators on different subjects.” HSBC said it was “very engaged on policies and developments of this nascent industry in Hong Kong”.

As the US continues to hammer the final nails in its crypto coffin, Hong Kong and Singapore are vying to become a regional web3 hub, with the potential of attracting exiled crypto clients. Just this week, blockchain solutions provider Sygnum received in-principle approval for its Major Payment Institution License (MPIL) application.

Whether you're #TeamSG or #TeamHK, it's certainly an exciting time for the region.

Elsewhere:

  • The SEC has finally responded to Coinbase's request for crypto clarity. On June 14, Coinbase's chief legal officer, Paul Grewal claimed that the regulator falsely claimed to have made no decision on new crypto rules. Instead, the SEC requested an additional four months to make its recommendation on Coinbase's July 2022 petition calling for more industry clarity. Grewal criticized the SEC for "ignoring the clear statements of the Chair that confirm they have no intent to issue new rules."
  • Ripple is calling for a new investigation into the former director of the SEC, Bill Hinman. Stuart Alderoty, the chief legal officer at Ripple, wants to dig into the reasons behind its 2018 speech about crypto transactions in which he stated that Ethereum should not be considered a security as it was “sufficiently decentralized.” Alderoty's comments triggered backlash when the SEC sued Ripple Labs for selling XRP as an unregistered security. Ripple had been pushing for the release of the recently released documents in which the wording of his speech was enclosed. The firm argued that Hinam's statements imply that XRP should also be regarded in the same manner and exempt from security classification, which is the premise of SEC's lawsuit. Alderoty now claims that Hinman “invented factors” to determine what constitutes sufficient decentralization.
  • Singapore-based startup Finblox is tokenizing US Treasury bills in a partnership with OpenEden. Through its "superapp," Finblox aims to offer a smart contract vault that provides access to tokenized bills. The firm is initially targeting customers in the Philippines, Indonesia, India, and Vietnam. By tokenizing Treasuries, international investors will have the opportunity to invest in secure assets in smaller increments. OpenEden's Treasury bill vault, integrated with Chainlink, ensures on-chain evidence that the tokens are backed by real assets. “Treasury bills are considered to be one of the safest assets on earth,” Peter Hoang, CEO of Finblox, told Blockworks.
  • Sportswear giant Puma has launched its 3D metaverse experience, Black Station. The platform provides an immersive space for Puma Pass nonfungible token (NFT) holders to access exclusive product drops. Anyone can experience its metaverse but only RB token holders (tokens airdropped to Puma Pass holders) can purchase a digital  "Rulebreaker" sneaker and claim two digital wearables. The tokens can also be burned to access various product drops in the metaverse. However, the experience will only remain open until 23 June. More events and NFT drops are planned for the future.
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