By Sharan Kaur Phillora
The Hong Kong Monetary Authority (HKMA), on April 27th, called on banks via a circular to provide services to cryptocurrency firms. The document required Authorized Institutions (AIs) to “support virtual asset service providers (VASPs) licensed and regulated by the Securities and Futures Commission (SFC) on their legitimate need for bank accounts in Hong Kong.”
Here’s what we know:
The deputy chief executive of the Hong Kong Monetary Authority (HKMA), Arthur Yuen, said in a report published on the regulator’s website, “There is no legal and regulatory requirement prohibiting banks in Hong Kong from providing banking services to virtual assets (VA) related entities.”
Specifically, HKMA disclosed its key priorities are a safe and efficient banking system and access to banking services for legitimate businesses. Having that in view, authorized institutions are to adopt a risk-based approach in anti-money laundering and counter-financing of terrorism.
As a good practice suggestion, “AIs should review their account opening procedures and customer due diligence (CDD) measures,” HKMA stated in the document.
According to the authority, AIs should rather consider the ‘approval-in-principle’ issued to VASP license applicants by relevant authorities than take no action until the VASP license is granted. This implies that banks should provide services to VASP even before licensing approval is obtained.
Recently, Hong Kong has been making moves suggesting embracing cryptocurrency after displacing hostilities to the industry in the past. The nation has dished out crypto regulations and is getting set to adopt new regulations that will officially allow retail investors to buy and sell cryptocurrencies. This is expected to take effect from June 1, 2023.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.