Chinese internet giant Tencent is set to open a blockchain-based virtual bank after the Hong Kong Securities and Futures Commission (SFC) approved a new license. The major Chinese tech firm is just one of the many mainland companies looking to expand into Hong Kong, where the virtual banking market is worth US$15 billion as it provides financial services to customers with much lower fees.
Though the company offered no further details, various media in China
saw the move as a positive turn in the cryptosphere. Moreover, financial
regulators in Hong Kong are reportedly issuing new rules for virtual
securities, further demonstrating increased acceptance of blockchain and crypto
“Hong Kong’s new regulations and supervision on digital assets transactions validates the importance of blockchain technology and digital assets, which is good news for the whole industry,” Weige Cai, Tencent’s General Manager for blockchain said.
The SFC has granted virtual bank licences to 12 entities so far. Other companies include Alibaba’s fintech arm Ant Financial and SC Digital Solutions Limited, whose 65 percent stake is owned by Standard & Chartered Bank.
The SFC published details about its new licensing system to regulate virtual asset transactions in early November 2019, creating a similar framework to the one overseeing securities brokerages.