HSBC & Standard Chartered hesitant to serve crypto customers despite Hong Kong pressure

While Hong Kong continues its global cryptocurrency hub plans, leading financial institutions remain hesitant to serve crypto customers. That comes as the United States regulators launched an intensified regulation in the digital asset space early this month.

The latest crypto updates reveal Hong Kong’s financial watchdogs have been pressuring renowned lenders, including HSBC and Standard Chartered, to accept cryptocurrency exchanges as customers.

HKMA pressures top banks to accept crypto customers

Sources indicate that Hong Kong’s financial regulators questioned the Bank of China and the two lenders on why they are reluctant to serve crypto clients. A 27 April letter had Hong Kong Monetary Authority telling financial institutions that due diligence should not mean an “undue burden” for crypto entities building offices in the city to explore opportunities.

Meanwhile, top banks remain reluctant to serve crypto customers, citing possible prosecution if the clients partake in illegal activities and money laundering. That could challenge Hong Kong’s plan to dominate the crypto space.

Hong Kong invites crypto entities amid US crackdowns

The US Securities and Exchange Commission stormed the crypto market with lawsuits against Coinbase and Binance (this month). The regulator accused the two largest exchanges of violating securities rules. Nonetheless, Hong Kong invited cryptocurrency firms, including Coinbase, to build in the city amidst SEC suits.

Hong Kong wants to re-establish itself as a crypto hub. The city has its history as far as the digital asset industry is concerned. It housed FTX before the now-insolvent exchange moved its business to the Bahamas. However, Beijing cryptocurrency clampdowns have hindered Hong Kong’s moves since 2017.

Standard Chartered, the Bank of China, and HSBC remain crucial for the city as Hong Kong’s currency issuers.