Hong Kong moves to ease crypto holding rules for banks

The Hong Kong Monetary Authority (HKMA) has proposed easing cryptocurrency regulations for banks, The Block reported, citing a local media outlet. The HKMA recently drafted a new banking supervision policy manual based on guidelines from the Basel Committee on Banking Supervision (BCBS) and has sent it to banks for feedback. The draft manual's core proposal would allow banks to hold cryptocurrencies issued on public blockchains, provided they have sufficient risk management systems in place. If implemented after the consultation period, banks could be subject to relaxed capital requirement standards starting next year. The move is seen as a signal of Hong Kong's renewed effort to become a crypto hub in Asia. The city has recently taken steps to embrace the industry by establishing regulatory frameworks for crypto exchanges and stablecoin issuers. Additionally, Hong Kong's Securities and Futures Commission has issued guidelines for licensed platforms to strengthen their custody systems for client assets. This approach stands in contrast to mainland China, which continues to prohibit cryptocurrency trading and mining.