Several state-owned banks in China have shown interest in partnering with cryptocurrency companies in Hong Kong, following the city's push to become a crypto hub. Despite China's ban on crypto activities in mainland China, the Hong Kong branch of the state-owned Bank of Communications is reportedly in talks to open accounts for regulated crypto companies in the city. ZA Bank, Hong Kong's largest virtual bank, will also act as the settlement bank for these crypto firms. These banks will enable the depositing and withdrawal of fiat currencies and allow token deposits at authorized exchanges to be withdrawn in Hong Kong dollars, Chinese yuan, and US dollars.
Hong Kong's government has attracted nearly 80 cryptocurrency firms interested in opening or expanding their business in the city. Financial Secretary Paul Chan clarified at the start of the year that the city aims to collaborate with more crypto firms in 2023. Despite China's crackdowns on crypto activities, Chinese banks and funds have partnered with crypto firms, showing China's growing interest in the crypto industry via Hong Kong. However, the partnership is limited to Hong Kong and does not reflect a change in policy in mainland China.
This move can be seen as a step towards the normalization of crypto activities in China, potentially opening up the country's economy to the wider crypto industry. As Hong Kong continues to embrace the crypto industry, more Chinese state-owned banks and companies may follow suit, expanding China's interest in the crypto space. Hong Kong has long been viewed as a gateway between mainland China and the rest of the world, and it appears that this role is extending to the crypto industry as well.
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