Hong Kong has established a reputation as an accommodating environment for cryptocurrency ventures. Recently, Johnny Ng, a member of the Hong Kong Legislative Council, has been advocating for enhanced accessibility to banking services for crypto and Web3 companies within the region.
Challenges in Banking for Crypto Businesses
Johnny Ng highlighted the prevalent struggles faced by crypto and Web3 enterprises due to stringent banking regulations. Despite Hong Kong’s efforts to establish itself as a global cryptocurrency hub, these companies often encounter obstacles in conducting smooth transactions and expanding their operations.
Ng stressed the importance of virtual banks expanding their services to support the digital asset sector, emphasizing that overcoming these challenges could align with Hong Kong’s ambitions for Web3 development and foster an environment conducive to innovation and growth in the digital economy.
Further underscoring the urgency of the situation, Ng shared data from a survey conducted among over 120 crypto and Web3 firms newly operating in Hong Kong. The findings revealed that 95% of these companies faced difficulties in opening local bank accounts, with only 20% succeeding within a reasonable timeframe.
Many firms reported excessively lengthy processes, with some taking more than six months to finalize their banking arrangements. Ng highlighted that such delays pose a significant hindrance to these businesses’ operations and scalability in Hong Kong.
Advocating for Change
In response to these challenges, Ng calls for policy reforms that would grant virtual banks more freedom in managing virtual assets. He proposed the establishment of a “virtual asset/digital asset bank” or empowering virtual banks to handle virtual assets, aligning with the government’s Web3 development initiatives in Hong Kong.
As Hong Kong refines its cryptocurrency regulations and introduces a crypto licensing regime, incorporating flexible banking solutions could represent a substantial step forward. This move could streamline operations for existing market participants and attract newcomers looking to enter the Hong Kong market.
Ng emphasized the importance of promoting the entire chain and ecosystem’s development to establish Hong Kong as a leading center for Web3 initiatives.
