China Merchants Bank International (CMBI), the Hong-Kong-based unit of one of China’s major banks, officially opened a cryptocurrency exchange on Monday.
According to an official announcement from China Merchants Bank (CMB), CMBI launched a virtual trading feature on its mobile app for qualified customers. The exchange is starting small – offering trading only in Bitcoin (BTC), Ether (ETH), and USDT, the stablecoin issued by Tether. The bank states that it “will continue to expand its virtual asset trading scope and upgrade its functionality in a steady and gradual manner.” Currently, only professional traders are allowed to use the exchange feature.
CMB manages over $1.6 trillion worth of assets, making it one of the largest Chinese banks. However, data from S&P Global shows it is still far behind the big four market leaders: Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, and Bank of China, each of which manage more than $4 trillion in assets.
Hong Kong hub
In mainland China, the official ban on cryptocurrency trading implemented in 2021 still stands. However, Hong Kong has been slowly moving forward with regulations surrounding crypto. It has adopted a proactive and controlled approach, with licensing for exchanges, stablecoin issuers, and custody providers.
On 1 August, the most recent regulation surrounding stablecoins went into effect from the Hong Kong Monetary Authority (HKMA). While there is concern with the potential for abuse such as money laundering via crypto or stablecoins, the HKMA is also trying to ensure the regulatory regime keeps up with the international market.
The first step
CMBI said it’s the first mainland-Chinese broker to have a virtual asset license in Hong Kong. The company also notes that the “integration of traditional stock trading, virtual asset trading, and financial technology applications,” will be important for developing investment portfolios for the future.
Mainland China has long used Hong Kong as a testing bed for financial and regulatory changes.
