Virtual Banks May be a Better Service Option for Web3 Companies

Hong Kong's virtual banks are at a pivotal moment, currently holding just 0.3% of all retail banks' assets and occupying a negligible share of the financial market.

According to the South China Morning Post (SCMP), Hong Kong legislator Johnny Ng Kit-chong, a proponent of cryptocurrencies, believes virtual banks have untapped potential to better serve companies in the Web3 sector.

He noted that while the government has made progress in developing virtual banks and improving services, these institutions have a crucial opportunity to contribute significantly to the Web3 sector in the coming years.

A major obstacle facing virtual banks in Hong Kong is the difficulty in opening accounts for companies dealing in cryptocurrencies, non-fungible tokens (NFTs), and blockchain technologies.

A recent SCMP survey found that 40% of these companies face significant challenges, citing strict standards and local barriers as major issues. These difficulties have led some businesses to relocate to more supportive regions, potentially hindering digital innovation in Hong Kong.

Despite these challenges, Johnny remains optimistic about the future of virtual banks, highlighting their “huge” potential if supported by a clear government strategy to develop the Web3 sector.

He also suggested exploring the possibility of integrating Bitcoin into Hong Kong’s financial reserves, viewing it as a potential hedge against inflation and a strategic asset for the region’s economic stability.