China Bank of Communications Co., Ltd.’s Hong Kong subsidiary reportedly collaborates with several crypto companies with secured licenses in Hong Kong.
According to reports, the state-owned bank works with several licensed crypto firms in the semi-autonomous city-state and has also approached other regulated companies to open accounts for them.
Per the reports, China Bank of Communications is not the only Chinese lender looking to take advantage of Hong Kong’s push to develop its crypto space, which has coincided with the recent failures of crypto-friendly financial institutions in the U.S. and the increasingly stringent regulatory environment in the country.
According to the Wall Street Journal (WSJ), several players in the Hong Kong banking sector have opened deposit accounts for crypto companies allowing them to take care of everyday operations, including paying service providers and employees salaries.
Hong Kong striving to attract crypto business
The move by the banks comes as Hong Kong is trying to position itself as a hub for crypto businesses and investors amid growing competition from other Asian financial centers such as Singapore and Dubai.
The city’s authorities have proposed a licensing regime for crypto exchanges and custodians and have encouraged banks to offer services to crypto firms.
Hong Kong’s virtual banks have also heeded the call. They are also attracting customers who want to use cryptocurrencies as the city’s government pushes for more innovation and regulation in the digital asset sector.
ZA Bank, the largest virtual bank in the city, announced last week that it would launch a service that allows customers to transfer fiat and cryptocurrencies between their bank accounts and digital wallets. The bank said it would support Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).
Hong Kong granted eight virtual banking licenses in 2019 to promote fintech development and competition in the banking sector.