Before acquiring an authorization, banks have been requested by the central bank of Hong Kong to offer services to cryptocurrency companies. The main banking body and regulator of the area, the Hong Kong Monetary Authority (HKMA), has urged banks to offer services to bitcoin businesses.
The HKMA released an advisory on April 27 that dealt with corporate clients’ access to financial services. The regulator stipulated in the paper that authorized institutions, known as ‘ALS’, implement a risk-driven approach in their combating money laundering activities.
The HKMA advised establishments to pursue new areas with a forward-thinking perspective. The financial institutions are especially obliged by Hong Kong’s monetary authority to assist virtual asset service providers (VASPs) in obtaining banking services. They remarked Hong Kong bank accounts should support VASPs via AIs.
The regulator emphasized that to avoid placing too much pressure on clientele, customer due diligence (CDD) procedures should be commensurate with the danger profile of the clients.
For instance, the HKMA stated that AIs should offer the offering prior to the license being approved if only VASP does submit an application to get the license from Hong Kong’s current cryptocurrency regulatory framework and merely wants to register a profile for its personal business use. The official stated that the consideration of VASP license applicants’ preliminary approval by authorized institutions.
Hong Kong’s New Measure
To help the cryptocurrency business while de-risking, lenders ought to educate their staff. Hong Kong approves new cryptocurrency legislation to enable buying and selling by ordinary investors.
However, that it proved actively luring cryptocurrency businesses, certain significant international authorities, notably the USA, nevertheless partially hampered the sector. The U.S. government’s resistance to creating clear regulations for cryptocurrencies, some significant exchanges, like Coinbase, which have thought of leaving the country.
The percentage of worldwide cryptocurrency developers with U.S. bases decreased by 26% between 2018 and 2022, in accordance with an analysis of Andreessen Horowitz.