The Hong Kong Monetary Authority (HKMA), on April 27th called on banks via a cellular 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.”

According to HKMA, the move is towards an understanding of market developments as it relates to the fast moving technology landscape. 

Specifically, HKMA disclosed that its key priorities are a safe and efficient banking system as well as access to banking services for legitimate business. Having that in view, authorized institutions are to adopt a risk based approach in anti-money laundering and counter financing of terrorism.

For HKMA AIs should give attention to initial customer contact, understanding of market developments, and risk management vs. wholesale de-risking.

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, AI’s should rather consider the ‘approval-in-principle’ issued to VASP license applicants by relevant authorities than taking no actions until the VASP license is actually granted. This implies that banks should provide services to VASP even before a licensing approval is gotten. 

The documents emphasized training of staff members by the concerned institution to deliver effectively on the approach detailed in the document. 

Recently, Hong Kong has been making moves that suggest embracing cryptocurrency after displacing hostilities to the industry in the time 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.

While Hong Kong is set on having good turns on crypto and firms in the industry,  U.S is building up a hostile environment tagt has made many exchanges kike Coinbase consider halting its services in the U.S.