Anika Begay
Hong Kong is one of the most crypto-friendly regions in the world, and so far it seems to continue to cultivate this friendly relationship with the industry. Recently, Johnny Ng, a member of the Legislative Council of Hong Kong, pushed for greater banking accessibility for cryptocurrency and Web3 companies in the region.
This initiative aims to remove all existing barriers between these cryptocurrency-related companies and local banking services in the region, which appear essential to their functioning, given their ties to financial services.
Banking woes for cryptocurrency firms
It is worth noting that the call to ease banking restrictions came directly from Johnny Ng, who highlighted the current challenges faced by cryptocurrency and Web3 companies.
Despite Hong Kong’s continued efforts to position itself as a global cryptocurrency hub, these companies often encounter rigid banking procedures that limit their ability to conduct seamless transactions and grow their businesses.
Ng stressed that these difficulties represent significant obstacles, suggesting that virtual banks should expand their services to support the digital asset sector.
In particular, if the region’s banks succumb to this pressure from Ng, they would not only align themselves with Hong Kong’s overall Web3 development ambitions. However, they could support a more conducive environment for innovation and growth in Hong Kong’s digital economy.
Further underscoring the urgency of the issue, Ng revealed the results of a survey his team conducted among over 120 cryptocurrency and Web3 companies that have recently launched operations in Hong Kong.
The data painted a grim picture: 95% of these companies attempted to open local bank accounts, and only 20% succeeded within a reasonable time frame.
Most companies reported excessively drawn-out processes, with many taking more than six months to finalize their banking arrangements. As Ng points out, such delays are not trivial, as they pose a critical obstacle to these companies’ ability to function and grow in Hong Kong.
A Call for Change
In response to these challenges, Ng advocates for policy reforms that allow virtual banks more freedom to manage virtual assets. His translated post on X reads:
Virtual banks should add diversified services and develop in a way that is not aligned with traditional banks. Hong Kong should establish a “virtual/digital bank” as soon as possible or upgrade the virtual bank to be able to manage virtual resources to coordinate with the SAR government’s Web3 development. Hong Kong should accelerate the development of the Web3 ecosystem.
In particular, as Hong Kong continues to refine its cryptocurrency regulation, as demonstrated by the launch of a cryptocurrency licensing regime that extends services to retail investors, the integration of flexible banking solutions could represent a major step forward.
This development could simplify operations for current operators and attract new entrants willing to venture into the Hong Kong market. Ng concluded:
If we want to become the Web3 center of Hong Kong, we must promote the development of the whole chain and the whole ecosystem as soon as possible.
Featured image created with DALL-E, chart from TradingView
