Bitcoin Forum

https://i.ibb.co/k4ZmN3G/BC3-E6521-19-C6-482-F-B6-E6-3-E26-A24762-AD.jpg
Hong Kong is a city and special administrative region in China which enjoy some autonomy on its own. It is a city with a population of 7.4 million residents of various nationalities.

Just recently, Hong Kong’s central bank reportedly reiterates on its call for major banks, including HSBC, Standard Chartered and Bank of China to accept crypto firms as clients. Despite the call for this, the banks are hesitant in doing so.

The Hong Kong Monetary Authority (HKMA) encouraged the banks not to be afraid during a meeting after which a circular was released to banking institutions last month.

Below is the HKMA circular to banking institutions in Hong Kong

https://i.ibb.co/bBRQz4c/63-B9-A338-7-D54-4472-9-E8-A-34116-A436-B1-E.jpg

The circular recommended and encouraged banking institutions to keep track on new market developments and to take a more daring approach to emerging markets like the cryptocurrency market. The institutions were particularly obliged by Hong Kong's central bank to assist cryptocurrency companies, which it refers to as "virtual asset service providers," in acquiring access to banking services.

This new approval by the Hong Kong central bank will make trading crypto a more friendly traded asset in that region that house many populations and also in the adoption of it because of the various nationalities present in that region of China.

Despite the circular and assurance to the traditional banks there, they are still hesitant in accepting crypto firms. What could be their reason for being reluctant in accepting crypto firms as clients?

Source:

https://twitter.com/watcherguru/status/1669373334776078336?s=46&t=AFO-ngiNXBXd6CFRPg8kKg

https://cointelegraph.com/news/hong-kong-government-pressures-bank-giants-accept-crypto-clients

https://watcher.guru/news/hong-kong-urges-hsbc-standard-chartered-to-support-crypto-exchanges

Hongkong the same as Singapore always have the same idealogy regarding being business hub internationally.
But with the previous incident in Hongkong regarding the takeover of the China on the city looks like it hit different from other businesses. Knowing what kind of government China have towards businesses, i dont know.

This sounds great!
But I don't really trust this news, considering that officials hate bitcoin and crypto. they can block this decision pretty fast.

I think, as long as the government can't tax bitcoin, they won't allow people and companies to freely use it.

And I think right now we don't need it because adoption is moving very slowly, people are afraid of bitcoin because of the price and fluctuations.

They have same idealogy for their territory developments but they have some big differences in politics.

Singapore is a small nation but it does not relate to any territory conflict like Hongkong. Hongkong is like Taiwan which are facing with bigger pressure from China mainland even with army interventions. It puts future of Hongkong into uncertainty and the same for Taiwan.

The news is great as it opens more chances for cryptocurrency and blockchain companies in that island and it is another big support from their governments and banks for the industry. It is a good start but we will need a few months to see real impacts from Hongkong banks for companies in this field.

This is good news for Crypto and Bitcoin, countries trusting Crypto is a solid move and much needed one in the long run. Most probably they are just inspired from their neighbor, Singapore.
Something that should be fixed in every country is the tax on Crypto gains, it's way too high. Make it similar to what you would pay for gains on stocks? That will be fine.

Indeed, this is one piece of good news at a time when the market is very volatile and it signifies the increasing trust and acceptance of cryptocurrencies by countries, which is essential for their long-term survival. It seems like Hong Kong was inspired by its neighbor Singapore, which is known for its crypto-friendly regulations as you say.

As for the tax treatment, In my view These are Different Asset Classes meaning Comparing the tax treatment between cryptocurrencies and traditional stocks may not be appropriate as there are inherent differences. Cryptocurrencies are a relatively new asset class with unique characteristics, and some argue that they should be subject to different tax regulations that reflect their particular features. Implementing a standardized tax framework for crypto profits similar to stocks may require international cooperation and consensus, which may difficult to achieve because tax rates must reflect the potential risks and benefits associated with cryptocurrencies and their impact on the wider economy.

Bitcoin have gained a lot of popularity in recent times and many people have heard about it. Many negative news have also being attached to bitcoin from those that don’t like the existence of it. We all know bad news spreads like wildfire, the negative notion attached to the use of bitcoin might be the reason these banks are sceptical in accepting crypto firms. They’ll accept it overtime, but it’s going to be a gradual process before many traditional banks there will accept crypto firms fully.


About the tax, it’s a must for the government to adopt it. Every nation needs to collect tax for a sustainable economic work flow in the country. This is not just about the tax, if tax are employed here, the citizens who still know the positive potential part of bitcoin will still venture into it. This is a very good news and hoping for the adoption to continue to increase daily around the world.

As I know, several news companies have investments in crypto, we can find out if they always present great news for certain coins they invest in, but for Bitcoin, I think they present a piece of real news because Bitcoin is global, they don't have any tendency for that,

Not all country, like Indonesia where the government takes the Tax for Bitcoin, The company and People still has limited to use of Bitcoin, People can invest in Bitcoin as Digital Asset only, Not for currency and transaction. So If they find it (people use as currency), that tourist will be fined like in Bali a long time ago.

Bitcoin price will not be stable until all people countries use it like Dollar. of course that won't happen soon, If they can patient in certain time, they will get profit if follow the halving time.

I don't know whether this policy has to get the blessing of China, considering that HK is only a semi-independent country and cannot escape China's supervision.
If the banks also serve mainland Chinese users, then it raises concerns that the government will restrict the banks instead. Or the government could completely intervene in this policy at a later date.

Although I see no justification for this fear if it was the Hong Kong government that officially gave these permits and encouragements to banks.

But I think they may be afraid of getting the same fate as the crypto-supporting banks in the US, maybe they are afraid that the Chinese government will change its attitude towards bitcoin and cryptocurrency in the future and force Hong Kong to ban cryptocurrency.

There could be many reasons, but I expect the most important is regulatory uncertainty, Bitcoin and cryptocurrencies are still at a very early stage in gaining acceptance and full regulation.

The decision made by Hong Kong authorities to support Bitcoin and other crypto-currencies is appreciable, however there can be some issues in the initial stages of it. The banks will slowly adopt to the crypto-currency payments and that will really have good impact on the crypto-market in the long run. I think this news is quite sufficient in such times to fix the current problems that the market is facing. If Hong Kong is favoring crypto-currency payments then many neighboring countries will do the same.

I also believe that Hong Kong has been inspired by Singapore to accept crypto-currencies as valuable assets that could be tradable with fiat. I think this is one of the best decisions ever taken by Hong Kong authorities. Although, they have suggested the banks to adopt crypto-currencies, but I still think that banks won't start accepting the crypto-payments anytime soon. However, after sometime most of the banks will have to accept the crypto-currencies.

Banks are expected to embrace companies in the cryptocurrency realm, rather than accepting cryptocurrency as a form of payment. This distinction is crucial because cryptocurrency companies operate within the cryptocurrency space, whereas accepting cryptocurrency as a banking transaction method is an even more radical shift.

In practice, banks accepting cryptocurrency would result in certain circulating cryptocurrency assets being held in custodian wallets. The original owners would not have full control over their funds. This raises concerns related to the concept of "Not Your Key, Not Your Bitcoin," as centralized entities may appear to exploit their clients' wealth for internal banking purposes.

this is not about banks accepting crypto.. this is about banks working with and accepting business from licenced CEX (crypto centralised exchanges)
this would require such CEX to be regulated and monitored and licenced so that the burden of proof of KYC falls on the exchange.. not the bank, thus all the admin of surveillance and reporting of CEX customers trades falls on the CEX to do. whereby the CEX then authorises payments which the bank processes on CEX behalf. not the customer directly.

this then allows the banks to not have the concern/worry of any criminal acts being their fault if a criminal customer of the exchange manages to launder funds. instead it would be the CEX that gets fined/punished for not doing the due diligence

all the banks have to do is ensure the CEX they do business with are regulated/licenced businesses..

this is then as a side-hit going to hurt any hobby/independent exchanges on DEX platforms, whom are unlicensed/using personal accounts, which banks will ban those accounts operating as but not registered as a money service business

They're being taken over by the One China policy so it's not really surprising that they're afraid, China's expediting the expiration date of their independence and we all know how notorious China is when it comes to bitcoin and cryptocurrency, push and pull relationship. I don't think a decade is early stage, there's not a lot of things to learn about bitcoin anymore that hasn't been covered already, and the only thing that needs to happen now is the deployment to test it in state level, to learn something new.

The justification here is that the people are likely to be getting closer to seing their government realizing what they want and giving them the opportunity and that avenue to display their interest using the decentralized digital currency which is bitcoin, some countries have already sufferd this ban long time ago when their government ban the commercial counterparts, financial institutions banks.


The way things are going now could not be any longer predictable again even as for the government because things are just changing and new outcomes and approach are being experienced from them, this begins with China and we may not know what US will later turn to be despite it current regulation challenges.

It will take time until these banks will do what's being said to them by the government. It can't be removed that they're scared of this rule that's being enforced since it's possible that they're all aware of its volatility.

This look as a good news. But to implement it and to obey it won't be on an instant and that's why I think that it's going to take a lot of time before it's accepted.

If not, then that's much better as they might become a potential crypto hub which is being pushed by their government to source out every potential income gathering for their country.

HKMA' action propels us towards a fusion of finance and tech. The reluctance of banks underscores the needed transition.

Is it banks' wariness or due diligence? Given crypto' erratic nature, regulatory fog, and abuse risk, their concern seems justified, right?

Yet, doesnt progress demand a step into unknown? Banks will have to adjust. The point is, when will they see its better to lead than lag? Change is a certainty, so why not champion this new economic world? Only time will tell

Meh. This news is not big enough to lead to attraction of "huge" investment. Not to mention there are two other reasons why this statement is not true. First is that this is more about regulation than adoption, which means more restrictions and monitoring, specially considering the attitude of China towards bitcoin. It is not like they adopted bitcoin as legal tender.
Secondly in the current economy, with recession and everything, high risk investments (which the crypto industry falls under) are very rare and if they happen they are going to be small. Also one of the reasons why bitcoin price hasn't gone to the moon yet.

The case of Hong Kong shows that legislation isn't everything. Banks are allowed to have crypto clients, but they don't want to do it, even when the central bank is telling them that they should. I guess the banks there still see crypto businesses are rivals rather than potential partners, so they don't want to help them out. It must be hard to artificially create a crypto-friendly environment in a small special part of a big authoritarian state that generally is against decentralization and crypto businesses. Maybe the policy of radically different approaches within one country doesn't work as well as it's supposed to.

Actually it will not became their rival if they just adopt and allow their clients to store it on their banks. Maybe they are just worried about its volatility so maybe they should do certain disclosure that they cannot do anything with volatility and they can still get according to what volume they deposit.

 This is actually alternative source of income by banks so its ideal if they could just accept it and throw away those doubts about negative things about crypto.

In Hong Kong, according to the government system, obviously they still have a contract with China with a certain time limit. So that as much as possible at this time they are becoming crypto-friendly areas so that their citizens feel complete freedom. But what if the agreement is completed, will banking policy return to normal where the banks that we usually see are always against the existence of crypto and the system that is not liked, it turns out that Hong Kong shows a different attitude. This is what I like about Hong Kong, because it is still in the circular phase and still requires quite a long stage to be formalized globally and enforced in all regions.

This is the opposite case of what is happening in most parts of the world. Most central banks have mandated commercial banks to stop dealing with crypto companies and those that disobey this directive have faced severe sanctions. Most of these banks in Hong Kong are multinational with their headquarters in most crypto unfriendly nations. Most of these banks have been mandated by the. headquarters not to deal with cryptocurrencies and they have to obey even when the host nations state otherwise.

The Central Bank of Hong Kong should take this policy or directive further by including sanctions. Banks that refuse to accept crypto firms should be punished. The bill should be sent to the legislative house and it should be passed onto laws that any bank that goes contrary to the directive of the apex bank should be sanctioned which could include fine, suspension, or even withdrawal of license. They should attack these banks the way central banks attack crypto firms.

Hong Kong used to be known as one of the three major financial centers of the world, before China got a hold of it and ruined it's credibility forever. Unfortunately the CCP is so opaque and erratic that nobody should trust their money in a Chinese bank, at least not if their based overseas. They'll undoubtedly find a certain range of clients, maybe even trying to pick up something like Binance because the rules have become more relaxed than they were previously, but any company based their is likely to be banned from many other jurisdictions due to the fact that external auditing is untrusted. Anything related to finance requires a lot of stable history, but the Chinese government have shown they are entirely unpredictable in that area.

Unfortunately for them the ever-changing attitude the Chinese government has towards this market is not going to help them at all to get the clients they want, as those clients knows very well the Chinese government can change their mind at any time and now they will have to accept massive losses to move away from Hong Kong, so it is obvious that anyone with the smallest amount of knowledge will not move their business there if they have any other option over the table.

The HKMA letter hardly has any direct relevance to cryptocurrency. Besides it is not a complete snippet that depicts the news, anyone interested can see the full HKMA letter at https://www.hkma.gov.hk/media/eng/doc/key-information/guidelines-and-circular/2023/20230427e1.pdf.

I don't like how the media portray the central bank to urge banks to accept bitcoin. It seems the letter is more about giving out regulation clarity instead of pressuring the banks to accept crypto firms' clients. To be realistic, it is necessary for the bank to do its own due diligence processes instead of merely being pressured and influenced by its own central bank decision. Essentially, they just inform more regulation clarity. It is expected noting Hong Kong's inclination to be a crypto hub.

The Hongkong government is most likely getting the blessing from China or who knows it is a move by the Chinese government while the US SEC is persecuting crypto companies and groups. China though needs HK to put some pressure or let's say encourage its big banks to accept crypto firms since the US elections are already happening next year. These crypto firms need to acclimatize if they are to relocate to Hongkong and if successful then they might no longer need to transfer again to the US if the Biden administration loses next year.

Considering that the letter has already been circulated in Hong Kong, I also hope that there will be very deep progress there which specifically refers to banks that want to support cryptocurrency companies as well as companies that do provide services for cryptocurrency. This is certainly not strange for them as a fairly large country with a very large population, but I was only a little surprised by the circulation of the letter.

As for the adoption of cryptocurrencies in the Chinese region, actually I still doubt it a little because in the past there have been some bad news for cryptocurrencies that also came from there. But if at this point they have started to open their minds to cryptocurrency companies and also instruct banks to support cryptocurrency companies through the letter, I think that is a very good thing because this could have an impact on increasing cryptocurrency prices in the future if it really happened there (Hong Kong).

Their reluctance to accept crypto companies as clients may be because there is news about the SEC inspection that recently occurred on large crypto exchanges so that banks are still hesitant to accept crypto companies as their clients, but they will continue to study this if there is an intention to advance crypto companies in the region.

The China had some of time to recover their own economic resources.When the China had surplus money,the money flow to the market will be very high.When the flexiblity of bank was increased,we can expect the government to help the people.As the loan was by the government activities reduced,the money flow increased to the maximum and economy activities.

It would be a little strange if indeed Mainland China is behind this sudden acceptance on providing liquidity to centralized exchanges through banks. Because, it would be more convenient for them if their CBDC, the digital Yuan expanded as much as possible without the competition Bitcoin and alternative coins could offer against the Yuan.

One of the only reasonable explanations in the case China is indeed behind this move is for them not to completely be left behind as the crypto ecosystem and adoption continues to grow around the world, it would be a mistake for a superpower like China not to have a plan B in case Bitcoin becomes an international asset/commodity which governments started to accept for their own businesses and foreign commerce.

Whatever the Hongkong government is doing is a good step actually. I hope all countries will be as open to Bitcoin or crypto industry. Perhaps this country also saw that it would bring a lot of good effects to their economy because of the concept that Bitcoin has.

That's why they are now making a good adoption of it in their country for their communities about the innovation technology brought by Bitcoin. This is really a very good decision by Hong Kong, doesn't it seem like this country also said that Coinbase should move to their territory instead of staying in the US country if I'm not mistaken.

Well, it is obviously something positive for cryptocurrency amid all these bad news circulating all around and this might make a positive impact, but I really doubt if this can be sustainable for the makes and Hong Kong authorities will be able to keep their word. We all know that banks use the money their clients deposit to earn more money, and cryptocurrencies are volatile assets, if firms keep their cryptocurrencies with banks, they won't be able to turn them into liquid cash and if they do so and when the firms demands them back, they might have to lose money to buy and return the assets since prices can go up as well.

So all in all, it's a good news with possibilities of bringing some positivity among traders and the market, but at the same time, it could backfire anytime if the banks suddenly announce that they are not going to do that because it can bring them losses in the long run.

The explanation for this move is simple.....

Once the Banks partner with Crypto currency linked businesses, China can trace more of the Crypto currency transactions. This is not a move to increase Bitcoin (Crypto) adoption, but rather an opportunity for them to identify citizens that are using Crypto currencies.

These businesses are over regulated and it will be a golden opportunity to link people with their coins. Everyone that use these businesses, will lose all pseudo anonymity that the technology offered them.  ::)

I was expecting a good impact on the market but unfortunately, other developments made a reasonable impact. this post made me a reminder some analyses including BalaJii assuming BTC extreme pump upto $1M valuation in 90 days and a maximum of the social media crypto influencers were using the Future (Now Present) developments plans of China going to put a good impact on that prediction but now as time has passed and developments are ongoing still market is standing right there where it was on the time of prediction.

The rest of the things are good currently the impact seems nil but always expect good even from the negativity. But the point is still here a pretty famous macroeconomy analyst even failed to predict the crypto market haha.

Very interesting discussion. Let me just add a little. The reluctance of traditional banks to accept crypto companies as clients can be attributed to several reasons and I think that makes sense in light of Regulatory Uncertainty. Well, The regulatory landscape around cryptocurrencies is still evolving in many jurisdictions. Traditional banks operate within a strict regulatory framework and are cautious about engaging with crypto companies due to the potential risks associated with regulatory uncertainty. The lack of clear guidelines and regulations regarding cryptocurrencies can make it difficult for banks to ensure compliance and mitigate legal and financial risks.

Negative news about the condition of the crypto market also sometimes creates a connection between cryptocurrencies with prohibited activities, fraud and fraud, which has created a negative perception in some circles. Banks may be aware of the potential reputational risk that can arise from being associated with crypto companies. Instances of high-profile hacks, exchange failures, and regulatory breaches in the industry have contributed to this in recent times.

Your reflection on banks embracing cryptocurrencies for corporations is profoundly stirring. We must reckon the consequences of this shift, which indeed deviates from established banking traditions. Cryptocurrencies, being highly volatile, might impose substantial risk on banks. If these digital assets appreciate enormously, banks could be strained to fulfill withdrawals. On the flip side, a drastic decline would see firms enduring severe losses. Nonetheless, we can't overlook the potential of this change as a signal of wider acceptance for cryptocurrencies. Its adoption might prompt more entities to view them as tangible assets, thus enhancing stability. However, the feasibility of such a move remains a moot point.

Although it did try as much as possible to stop the growth of bitcoin and crypto by banning them and imposing strict rules to close and issue penalties on miners and investors. China which used to be top or 2nd when it comes to crypto trading volume made it hard for its citizens and investors. Yet bitcoin and crypto as always bounced back and its growth continued as it recorded ATHs every halving cycle. Even some Chinese continued to invest and trade in crypto and its firms relocated outside of China just like Binance the biggest crypto exchange in the world. So Chinese government acknowledges how useful and essential it is by creating its own CBDC. And now letting Hongkong do its crypto adoption trying to lure centralized exchanges.

China indeed does not want to be left behind and I won't be surprised if it lifts its ban on bitcoin and decentralized crypto once the Hongkong experiment is beneficial to them.

Another good additional good news for our crypto community in this industry. This is a good step taken by the country of Hong Kong, to be honest. This country is also becoming an excellent example for other countries that still have doubts or doubts about Bitcoin or Cryptocurrency.

It will probably be like other countries that are open to crypto businesses or friendly governments in adopting digital currency like this. Hongkong is doing a good job.

I agree that this is nothing more than a honeypot, on the surface it may seem as if this is a sign of openness towards this market and its investors but this is not true, the government just wants for people to lower their guards and use those banks, and then once enough people have fallen for their ruse they will once again change the rules of the game and tax them to incredibly high levels or they could just take legal actions against them.

If one grows, the others will definitely follow, especially since there is a policy leeway from the local government in terms of the legality of use. Yes. Asia has a large market share, especially Hong Kong, which has taken off as stated by the OP. previously. We'll just have to see if the progress is progressing or even decreasing enthusiasm in terms of its use.

Yes they are working very smartly and it started few months ago when Hong Kong released the statement regarding forming an authority through their finance ministry who will keep track of crypto within the country. I think this must one of the element from that development itself. Such happening news from the Japan. Compare this with the US and their regulations in that they are going so strict that banks are filing bankruptcy. Now this is entirely different side of the same giving new hopes to crypto companies and also banks working alongside them. They will definitely have giant accounts as we know very well how much money is transacted via crypto currencies. :)

It would have been a blast on Bitcoin price if this was the entire China but there is more to the news. I mean, why is it that it's only Hong Kong that has been pushing for the adoption, what are they going to when the government appeal in court? The court will not favour them because the central bank has this autonomy over commercial banks and they can't go against their only source of fluidity to fiat unless they want to start printing their own cash from elsewhere, that's not possible though. :-\

Anyways, let's be positive, perhaps when banks from other states start seeing competition, they will be forced to start accepting bank deposit and the majority will align in the same principles but where is the decentralization?  ??? I would take it as an adoption.  ;)