Johnny Ng, a member of Hong Kong’s Legislative Council, has called on the government and banking sector to ease restrictions that are hampering crypto firms from accessing essential banking services.
Ng noted that many crypto companies have faced significant challenges in opening local bank accounts, which is stifling their ability to operate effectively.
In a recent post on X, the Hong Kong lawmaker urged virtual banks to broaden their services and work in tandem with traditional banks. He wrote:
“Virtual banks should add diversified services and develop misaligned with traditional banks.”
Crypto Firms Face Challenges in Hong Kong
Ng’s comments were backed by a recent survey conducted by his team. The survey gathered responses from over 120 crypto and Web3 firms that have entered Hong Kong since 2022.
The results revealed that 95% of these firms had attempted to open local bank accounts, but only 20% succeeded within two to five months.
For 54% of the respondents, the process took six months or more.
The survey also found that many banks required shareholders or directors to make multiple trips to Hong Kong before accounts could be opened.
The difficulties crypto firms face in opening bank accounts have been a persistent issue in Hong Kong despite the government’s ambitions to position the region as a global crypto hub.
This comes at a time when Hong Kong has introduced a crypto licensing regime, allowing licensed exchanges to offer retail trading services.
However, some lawmakers, including Duncan Chiu, have expressed concerns that overly stringent regulations are deterring major global exchanges from entering the market.
Hong Kong Pushes for Crypto Regulations
Hong Kong is actively working to establish a robust regulatory framework for the cryptocurrency industry.
Last year, the SFC initiated consultations on regulatory rules for the sector.
In March, the city-state’s Virtual Asset Service Providers licensing regime came into effect, requiring crypto exchanges to register with the regulator.
On February 29, the deadline for virtual asset trading platform (VATP) crypto license applications in Hong Kong passed, with the number of applicants reaching 24.
While Hong Kong continues to position itself as a crypto-friendly hub, the region witnessed a series of crypto exchange closures in May.
On March 28, 2024, HKVAEX, suspected to be affiliated with Binance, withdrew its license application.
Subsequently, on May 14, IBTCEX, QuanXLab, and Huobi HK followed suit, followed by Gate.HK on May 22, OKX HK on May 24, and Bybit (Spark Fintech Limited) on May 31.
Back in June, Hong Kong government entities have attended a tech conference in Toronto, where they showcased the city’s offshore ready-to-move technology hub for Canadian crypto and Web3 startups.
The Hong Kong Economic and Trade Office in Toronto (Toronto ETO), Invest Hong Kong (InvestHK), and StartmeupHK (SMUHK) collaborated to co-host an event at Collision 2024.
The city-state has also turned its attention to decentralized finance (DeFi) and metaverse technologies in an effort to strengthen its position in the global fintech landscape.
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