Johnny Ng, a member of Hong Kong’s Legislative Council (LegCo), has called on the government and banks to ease restrictions on banking services for crypto and Web3 companies.
The lawmaker said that crypto businesses continue to face challenges in opening local bank accounts. In a post on X, Ng highlighted that these difficulties are “hindering their ability to conduct business effectively.”
Ng argued about the need for virtual banks to diversify their services and work in complement with traditional banks. He suggested that Hong Kong should upgrade its virtual banking system to manage virtual assets, aligning with the government’s goals for Web3 development.
According to a survey conducted by Ng’s team, involving over 120 crypto and Web3 firms that entered Hong Kong after 2022, about 95% had attempted to open local bank accounts. However, 70% of the respondents reported that banks required their shareholders or directors to make multiple visits to Hong Kong. Only 20% of the firms managed to open accounts within two to five months, while 54% took at least six months or longer.
The difficulty of opening bank accounts has been a persistent issue for crypto firms in Hong Kong, despite the government’s plans to establishing the region as a crypto hub.
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In June 2023, Hong Kong introduced a crypto licensing regime, allowing licensed exchanges to offer retail trading services. However, concerns have been raised over the stringent regulations required for obtaining a license, leading some global exchanges, including OKX, Gate.io, and HTX, to withdraw their applications.
In 2023, the Hong Kong Monetary Authority (HKMA) reportedly exerted pressure on prominent banks such as HSBC and Standard Chartered to take on crypto exchanges as their clients. Despite regulatory crackdowns in other parts of the world, the HKMA says it aims to create a more inclusive environment for the growth of the crypto sector in the region.
During a meeting, Hong Kong’s banking regulator questioned UK-based firms and the Bank of China about their reluctance to establish relationships with cryptocurrency exchanges. Additionally, HKMA advised banking institutions not to place an excessive burden on crypto clients, particularly those looking to establish a presence in Hong Kong, during the due diligence process.
According to news reports, the watchdog explicitly mandated financial institutions to assist cryptocurrency firms, referred to as “virtual asset service providers,” in obtaining access to banking services.
