The drive to establish Hong Kong as a global hub for cryptocurrency has created opportunities for China State-affiliated banks to partner with Crypto companies.
Despite a general restriction on cryptocurrency-related activity in mainland China, the Chinese banks have expressed interest in forming alliances with and onboarding regulated crypto companies in Hong Kong.
China’s State-affiliated banks and crypto companies
The big Chinese state-owned Bank of Communications’ branch in Hong Kong is working with a number of local cryptocurrency companies.
This was confirmed when the Wall Street Journal reported that the bank is negotiating to open accounts for regulated businesses.
In addition to that, the largest virtual bank in Hong Kong, ZA Bank, which is owned by Chinese online insurer ZhongAn Online P&C Insurance, will serve as the settlement bank in addition to the Bank of Communications.
Together, the banks will make it easier to deposit and withdraw fiat money.
These banks will act as settlement banks to enable token deposits at authorized exchanges to be withdrawn in Hong Kong dollars, Chinese yuan, and US dollars in addition to offering account services to cryptocurrency firms.
Paul Chan, the financial secretary for Hong Kong, stated at the beginning of the year that the city wants to work with more cryptocurrency companies in 2023.
Due to the government’s progressive stance on cryptocurrencies, about 80 cryptocurrency companies have expressed interest in setting up shop in the city or growing their operations there.
Other notable development for cryptocurrency in Hong Kong
Chinese banks and funds have emerged as some unexpected partners in the government’s crypto campaign.
The second-largest insurance company in mainland China, CPIC, has recently launched a cryptocurrency fund that is targeted at institutional investors.
According to Cointelegraph, the Chinese government-backed CPIC Investment Management opened two crypto funds in addition to welcoming cryptocurrency businesses and opening bank accounts for licensed businesses.
Many in the crypto world have been shocked by China’s growing interest in cryptocurrencies via Hong Kong, as the country has repeatedly cracked down on activity related to cryptocurrencies on the mainland.
About Kumo
Kumo, registered as Kumo Technologies Inc in Delaware, U.S. is a fiat and crypto social payment app which allows users to exchange fiat (NGN) to crypto, save and earn interest in dollar with as low as $5, utility payment such as DSTV subscription, airtime, data among others.
Kumo wallet is your all-in-one social payment app for seamless payment solutions.
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[…] addition to that, State-owned banks partnered with crypto companies. All these were done in a bid to establish Hong Kong as a digital hub for businesses and blockchain […]