As a seasoned financial analyst with over two decades of experience in the industry, I have witnessed the evolution of banking and finance from traditional brick-and-mortar institutions to digital platforms. However, it is evident that we are still grappling with the integration of emerging technologies like cryptocurrencies and web3 into our financial systems.
As a dedicated analyst, I advocate for an enlargement of virtual banking services to tackle the obstacles encountered by web3 startups within our region, specifically Hong Kong. This expansion could pave the way for a smoother and more efficient digital financial landscape.
In simpler terms, legislator Johnny Ng suggested that Hong Kong should become more open to cryptocurrencies by broadening its virtual banking services, as web3 startups continue to encounter difficulties in obtaining financial services. He made this statement in a post dated August 9th.
Hong Kong Monetary Authority recently published a report on virtual banks. I have been praising the past Special Administrative Region government for supporting the upgrade of banking services and the development of virtual banks over the years, but my team has conducted research on the opinions of Web3 companies regarding banking services in Hong Kong, revealing a difficult situation with account opening, which hinders effective business development. Therefore, at today’s press conference, I proposed:
— Johnny Ng 吴杰庄 (@Johnny_nkc) August 9, 2024
Ng emphasized the need for virtual banks to diversify their services and proposed the establishment of dedicated crypto-focused banks, referring to a report by the Hong Kong Monetary Authority that highlighted ongoing difficulties web3 companies encounter when attempting to open bank accounts in the region. “The survey showed that web3 firms had difficulties in opening accounts, resulting in inefficiency in developing business locally,” Ng said.
According to Ng’s suggestions, it is recommended that virtual banks prioritize the requirements of web3 firms and speed up the construction of Hong Kong’s digital infrastructure. This is because “policies regarding virtual assets” are currently a hot topic in international governmental debates.
Web3 firms struggle with banking challenges in Hong Kong
In Hong Kong, startups focused on Web3 technology face difficulties when trying to open bank accounts because of strict regulations and the cautious stance taken by conventional banks towards the cryptocurrency sector.
Based on a report by the HKMA, about 95% of the over 120 web3 companies that set up operations in Hong Kong last year encountered challenges when attempting to open accounts with virtual banks. Furthermore, approximately 70% of these firms had to bring their shareholders or directors to Hong Kong multiple times, and around 60% were requested to keep fixed deposits. Additionally, over half (54%) of the companies needed six months or longer to open an account, with roughly 20% taking between two and five months, while about 3% were denied altogether.
In order for Hong Kong to establish itself as a hub for web3 technology, its administration is encouraged to accelerate their initiatives aimed at embracing this innovation. To achieve this goal quickly, they should prioritize the growth of the entire blockchain infrastructure and associated ecosystem without delay.
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2024-08-09 16:52