Chinese Banks Are Ready To Swoop Up Crypto Companies Fleeing The US

Mar 27, 2023

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The recent bank failures in the US and the harassment they face from the government might push crypto companies into the hands of Chinese banks.

Crypto-friendly Chinese banks

Several Chinese state-owned banks in Hong Kong are becoming crypto-friendly. These banks to reach out to crypto businesses in Hong Kong. Some bank representatives have even visited crypto company offices. The banks that contacted crypto companies in Hong Kong include the Bank of Communications, Bank of China, and Shanghai Pudong Development Bank. They all have branches in Hong Kong and are now offering services to local crypto firms.

This shift is very surprising given that crypto trading has been banned in mainland China since September 2021. Although Hong Kong is still open to crypto, Chinese banks have been known to keep their distance from the industry.

Banking difficulties

Crypto companies have had trouble getting banking services in the past. This is especially true since several crypto-friendly US banks have failed recently causing financial problems for the industry. This has created an opportunity for Chinese banks to step in and help.

When one door closes, other ones open.

Chinese banks court crypto firms in Hong Kong | The Straits Times

— CZ 🔶 Binance (@cz_binance)

Crypto firms often face difficulties getting banking services. Banks are cautious because of the anonymous nature of crypto. This makes it hard for crypto companies to open bank accounts and do business. It can take up to three months for them to open an account. Even with an account, banks can flag transactions and suspend accounts.

As Hong Kong banks are becoming more open to crypto firms this will change soon. But there has not been a big shift yet. Background checks and anti-money laundering rules are still important.

Hong Kong the new global crypto hub

Hong Kong aims to become a major hub for digital assets and blockchain technology. The new global crypto hub is already very popular as more than 80 companies from China and other countries want to start Web3 operations in the city. The government is investing HK$50 million (US$6.37 million) in the sector. With support from banks and the Hong Kong government, the city could become the world’s leading crypto hub.

Based on the Chinese government’s new found friendliness towards the crypto industry the Asian country will try to swoop up the crypto firms in need of banking services.

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