Hong Kong’s virtual banks should serve Web 3 companies better, says top crypto advocate
- ‘It’s an important time for the city to contribute more to the Web 3.0 sector in the next two years,’ says legislator Johnny Ng Kit-Chong
Hong Kong’s virtual banks should strive harder to expand their services to capture a larger share of assets in the Web 3.0 industry than conventional bricks-and-mortar lenders, according to a legislator.
“The government has made efforts to develop virtual banks and upgrade services in the past few years,” Johnny Ng Kit-Chong, a member of Hong Kong’s legislature known for his support of cryptocurrencies, said during a media briefing. “It’s an important time for the city to contribute more to the Web 3.0 sector in the next two years.”
Ng’s call to action followed the decision this week by the Hong Kong Monetary Authority (HKMA) to stop issuing additional licenses for branchless banks, giving the city’s eight licensed operators room and time to grow. The eight licensees together owned HK$49.9 billion (US$6.4 billion) in assets last year, merely 0.3 per cent of the assets owned by all retail banks, according to the HKMA’s data.
Virtual banks were established in Hong Kong with the mission to spur fintech adoption, innovation and competition. By keeping their operations virtual, they save on the overhead of running bricks-and-mortar branches, which can cost as much as HK$1 million to operate, according to the city’s banking guild.
No virtual bank had earned a profit. But the potential is “enormous”, Ng said, adding that he expects them to break even by 2026.
