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Hong Kong investment firm supports development of cryptocurrency bank

While China continues to eye cryptocurrencies with a healthy dose of suspicion, acceptance, and popularity in the rest of Asia is on the increase. In fact, a Hong Kong-based firm is hope’s its investment will help pave the way for a cryptocurrency bank.

According to a recent report, the firm in question has bought a stake in a cryptocurrency company, a start-up with a goal to become a licensed and authorized cryptocurrency investment bank.

The platform, which is based in the crypto hub of Zug in Switzerland is, however, still awaiting approval from the Swiss Financial Market Supervisory Authority (FINMA) to trade as a banking and securities dealer.

This approval will allow the start-up to extend to Asia and assist blockchain-based platforms to gain access to traditional banking systems. The spokesperson for the investment capital firm explained their support of the start-up by saying that the firm believes it can support the cryptocurrency start-up’s plan to expand into Asia, a region where cryptocurrency trading and blockchain projects have been flourishing.

This support could extend to the start-up’s ICO, which is scheduled for some time in the third quarter of next year, where the investment firm could make a contribution.

While the capital firm manages over HK$7.83 billion ($1 billion) and has interests in FinTech and logistics, this is the company’s first foray into blockchain.

Both the investing firm’s investment amount, as well as the contribution of the U.S.-based asset management firm, have not been disclosed.

The start-up’s CEO stated that the bank’s first focus will be on transaction banking. It was explained that it has been tough for blockchain start-ups to grow their businesses as they are unable to access the traditional banking system.

The start-up, thus, is building infrastructure to allow companies to pay salaries in cryptocurrencies, and bridging the disconnect between fiat and cryptocurrency payment.

Another reporting agency previously reported that a few surveys show that there is indeed an interest in people having parts or even all of their salaries paid in virtual currency.

The company’s CEO also added that the start-up should receive the required regulatory approval in the first half of next year.

They will also eventually offer digital asset custody services to their institutional clients. In addition, the crypto bank will offer liquidity services to exchanges.

This growth in services will extend to staff numbers as the platform plans to double its number of employees by the beginning of next year.

As reported earlier, Hong Kong has been named the eighth-best city for tech enterprises, like the aforementioned start-up.

It was found that, with a score of 59%,  while Hong Kong is not typically viewed as an innovation hub for tech occupiers, it is becoming more appealing for several reasons which include connectivity with Shenzhen and South China, recent expansion in Hong Kong by big tech firms such as the world’s largest social media platform and one of China’s largest multinational conglomerates, which specialises in e-commerce, retail, Internet, AI and technology.

Moreover, tech occupiers are attracted to the accelerating investment in fintech in the city.

Moreover, the city is working to facilitate the introduction of virtual banking as another model of service delivery, with the Hong Kong Monetary Authority stating that it welcomes the establishment of virtual banks in Hong Kong, in early September 2018.

The development of virtual banks, according to the HKMA, will promote the application of financial technology [Fintech] and innovation in Hong Kong and offer a new kind of customer experience. In addition, virtual banks can help promote financial inclusion as they normally target the retail segment, including the small and medium-sized enterprises.

If Hong Kong keeps up this pace of manifestation (of the goals/objectives in the Smart City Blueprint), it will move up the ranks of the report.