Hong Kong has been one of the world’s crypto-friendly regions, and so far, the region appears to continue to nurture this amiable relationship with the sector. Recently, Hong Kong Legislative Council member Johnny Ng pressed for greater banking accessibility for crypto and Web3 firms in the region.
This initiative aims to remove any existing barriers between these crypto-related companies and the local banking services in the region, which seem essential for their operation, given their connection to financial services.
Banking Struggles For Crypto Firms
It is worth noting that the call for easing banking restrictions came directly from Johnny Ng, who highlighted the ongoing challenges faced by crypto and Web3 companies.
Despite Hong Kong’s persistent push to position itself as a global cryptocurrency hub, these firms often encounter stringent banking procedures that limit their ability to conduct smooth transactions and grow their businesses.
Ng emphasized that these difficulties are significant roadblocks, suggesting that virtual banks should broaden their services to support the digital asset sector.
Notably, should the banks in the region succumb to this press by Ng, it would not only align with Hong Kong’s overall Web3 development ambitions. Still, it could support a more conducive environment for innovation and growth in the digital economy in Hong Kong.
Further stressing the urgency of the matter, Ng revealed findings from a survey his team conducted among more than 120 crypto and Web3 firms that recently set up operations in Hong Kong.
The data painted a stark picture: 95% of these companies attempted to open local bank accounts, and only 20% succeeded within a reasonable timeframe.
Most firms reported excessively prolonged processes, with many needing over six months to finalize their banking arrangements. As highlighted by Ng, such delays are not trivial, as they represent a critical hindrance to these firms’ ability to function and scale in Hong Kong.
A Call For Change
In response to these challenges, Ng advocates for policy reforms allowing virtual banks more freedom to manage virtual assets. His post translated on X read:
Virtual banks should add diversified services and develop misaligned with traditional banks. Hong Kong should establish a “virtual asset/digital asset bank” as soon as possible or upgrade the virtual bank to be able to manage virtual assets to coordinate with the SAR government’s Web3 development. Hong Kong should accelerate the development of Web3 ecosystem.
Notably, as Hong Kong continues to refine its cryptocurrency regulations—highlighted by the launch of a crypto licensing regime that extends services to retail investors—the integration of flexible banking solutions could be a major leap forward.
This development could streamline operations for current players and attract new entrants eager to venture into the Hong Kong market. Ng concluded:
If we want to become the Hong Kong Web3 center, we should promote the development of the entire chain and ecosystem as soon as possible.
Featured image created with DALL-E, Chart from TradingView