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Chinese State Banks Start Favoring Crypto Firms: Details

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Mon, 27/03/2023 - 10:06
Chinese State Banks Start Favoring Crypto Firms: Details
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According to a recent piece by Bloomberg, crypto companies are actively moving to Hong Kong, seeing rising support from Chinese state banks for this nascent industry in the past several months.

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Head of Binance exchange Changpeng Zhao (known as simply CZ to millions of crypto users) commented on this news on his Twitter page, saying that as one door closes, others begin to open, referring to the recent crash of several major banks in the U.S. that were friendly to crypto.

One of those Chinese banks is BOCOM (Bank of Communications), Shanghai Pudong Development Bank and Bank of China.

Although the ban on crypto has been valid in mainland China for more than a year, the country's government seems to be helping Hong Kong to become a major crypto hub.

Chinese banks turn friendly to crypto

According to the source, the local offices of major Chinese banks have either begun offering their services to crypto companies or have been making inquiries into this issue. A person in the know who prefers to stay unnamed and who was referred to by Bloomberg stated that a rep of one of the mentioned banks paid a visit to a crypto company office to collaborate. According to him, this was green-lighted by Beijing; therefore, this and the uncertain lending situation in the crypto space are now presenting a big new opportunity for Chinese banks owned by the state.

These offers of cooperation are catching the public's attention after major banks in the U.S. have been slamming crypto firms, rejecting servicing them. Simultaneously, crypto-friendly banks in the U.S. — Silvergate, Silicon Valley Bank and Signature Bank — have called it a day and announced themselves insolvent. Some of them are being offered for purchase to other large banks.

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Ripple's CEO recently made a statement, saying that Ripple had tiny exposure to Signature Bank and stored a small part of their cash balance in it. However, the bank's closure caused no significant damage to the crypto giant.

However, none of the above-mentioned Chinese banks responded to Bloomberg's requests to comment on the situation.

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