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Hong Kong Urges HSBC, Standard Chartered To Support Crypto Exchanges!

While I hope this does work out because it could reignite some of the spark Hong Kong has lost. However, it's not the first time I see a regulator asking local banks to support some locally regulated sector (crypto, financial services, gambling). It rarely makes much of a difference, aside from some symbolic onboarding of top-tier operators. The banks still retain their legal right to refuse any client if they don't fit the bank's onboarding criteria. The vast majority will continue to be declined.

The regulator's effective influence is limited to domestic matters, which just means local customers and — most importantly — local currency. The banks don't want to expose their correspondent accounts, currency/payment network connections, or other licenses just to appease a regulator somewhere. As long as these banks also transact in USD, CNY, EUR, CHF, JPY, and other major international currencies, they can't only follow the wishes of one regulator beyond easing access to, in this case, HKD.

However, access to HKD wouldn't be something to scoff at. It's a freely exchangeable currency with quite a lot of demand, making it easy to buy and sell.
 
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The banks don't want to expose their correspondent accounts, currency/payment network connections, or other licenses just to appease a regulator somewhere. As long as these banks also transact in USD, CNY, EUR, CHF, JPY, and other major international currencies, they can't only follow the wishes of one regulator beyond easing access to, in this case, HKD
This makes PERFECT sense now! Banks are afraid to lose their lifeline!

So, the key is to present oneself to the bank in a way that minimizes the bank's risk! If one wants an account only in HKD and won't need the use of correspondent banks, one is easier to onboard, correct?
 
If one wants an account only in HKD and won't need the use of correspondent banks, one is easier to onboard, correct?
Banks will view that as an excuse to delay or not open accounts, since their systems aren't built to isolate customers like that.

I expect the outcome of this to be nothing, or extremely careful onboarding of domestic companies (domestic owners, domestic management, lowest risk profile possible) with accounts in HKD on domestic rails only (no SWIFT access). They'll get a couple of local companies signed up but the vast majority of international clients will continue to be rejected. A handful of tier 1 companies might qualify for SWIFT (HKD and/or other currencies) but even then with restrictions. The banks can then say they have done their part.
 
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Interesting turn of events...if true. Can anyone with accurate knowledge confirm?

Hong Kong Urges HSBC, Standard Chartered To Support Crypto Exchanges!

This is a bit like Malta when it asked its banks just to help open accounts for foreigners in the country doing business....lol. International banks have their own policies at a global level. It may just fall on death ears. The big bad wolf on the block is the U.S and these banks have U.S operations so whatever the U.S does not like the banking group as a whole has to follow or they could lose access to USD, heavy fines etc. Bottom line is HK cannot call the shots or change the reality unless the HK bank is outside the dollar and has no U.S operations.
 
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So, in a way, they are pushing most businesses to trade directly in crypto without fiat cashout, right?
That might be an indirect side effect, but it's more likely that the result is no change or only slight improvement for locally licensed crypto firms. Hong Kong is probably making this push to throw its crypto industry a lifeline. Why would you set up a crypto business in Hong Kong and have near zero chance of fiat access, when you can start the business in other regions where banks are slightly more open to crypto businesses (such as EU, Switzerland, US)?

Is this why most of my Chinese suppliers are asking for USDT payments instead of bank wire transfers?
That's probably because those suppliers find it easier to transact in USDT than in USD, and it might be cheaper to sell USDT for CNY than to sell USD for CNY. Depends on what business they're in. Capital controls and currency restrictions are a problem in China.
 
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