Julius Baer-Backed Crypto Bank SEBA Receives In-Principle Approval for Hong Kong License

SEBA Bank, a Switzerland-based financial institution backed by the Julius Baer Group, has taken a significant step towards providing digital asset services in Hong Kong.

According to reports, the Hong Kong Securities and Futures Commission has granted SEBA Bank an approval-in-principle (AIP), setting the stage for the bank's entry into the city's burgeoning crypto economy.

SEBA Bank, known for offering both traditional and cryptocurrency-related financial services, can serve as a custodian and allows clients to stake Ethereum (ETH), Polkadot (DOT), and Tezos (XTZ).

Amy Yu, the Asia Pacific Chief Executive Officer at SEBA Bank, has noted a growing demand for derivatives from cryptocurrency firms looking to hedge their positions. She also emphasised the interest in structured products and expressed optimism that the final regulatory approval from Hong Kong's authorities would come by the end of 2023.

Yu explained that SEBA Bank intends to assist local cryptocurrency firms that lack brokerage services, especially those not well-connected with traditional financial markets. This move aligns with Hong Kong's efforts to foster closer ties between the banking sector and domestic digital asset businesses, as exemplified by the involvement of major Chinese banks' subsidiaries in offering services to local crypto firms.

SEBA Bank's focus in Hong Kong will be on high-net-worth individuals and family offices.

Still, the bank's ambitions extend beyond Hong Kong, with Singapore being a potential future destination. Yu stated, "We did concentrate on Hong Kong to start; it is the first jurisdiction in the region. But we are still exploring Singapore."

Hong Kong's Crypto-Friendly Environment

Hong Kong has become an attractive destination for digital asset firms due to its crypto-friendly regulatory environment.

Jeremy Allaire, the co-founder and CEO of Circle, a stablecoin issuer, has previously highlighted the region's efforts to establish itself as a hub for digital markets and stablecoins. He also emphasised the potential consequences of regulatory uncertainty in the United States, suggesting that it could drive investors away from the country.

Several leading cryptocurrency exchanges, including OKX and Huobi, have also sought to establish a presence in Hong Kong. OKX applied for a virtual asset service providers (VASPs) licence in March, while Huobi initiated crypto spot trading and custody services at the beginning of the summer.

However, Hong Kong is not the only jurisdiction courting crypto firms. Singapore, Dubai, and several others have also made clear their ambitions to become blockchain and crypto hubs.

SEBA Bank's Expansion Plans

SEBA Bank's AIP from the Hong Kong Securities and Futures Commission is a crucial milestone in its mission to contribute to the global crypto economy's future. The AIP allows SEBA Hong Kong to operate with crypto products such as over-the-counter derivatives, provide advisory services for virtual assets, and conduct asset management for discretionary accounts in virtual assets.

When the licence is officially issued, SEBA Hong Kong will become one of the first licensed corporations in Hong Kong to offer investment services with crypto capabilities, positioning the bank as a prominent player in Hong Kong's growing crypto landscape.

Amy Yu, CEO APAC of SEBA Hong Kong, expressed excitement about Hong Kong's potential, citing the city's robust virtual asset regulatory framework and legal system. She noted that while China has a crypto trading ban, Hong Kong is strategically positioned to tap into the Chinese market when it eventually opens up.

SEBA Bank's decision to pursue a local licence in Hong Kong was influenced by inquiries from crypto companies struggling to access and manage their digital assets through traditional providers. Additionally, there is growing interest from private wealth and family offices in the region.

In Switzerland, SEBA Bank offers a range of financial services, including trading, staking, lending, and custody, making it a full-service global crypto bank.

The approval in principle from Hong Kong's regulatory authorities reflects SEBA Bank's commitment to compliance and due diligence, bolstering its position as a trusted and regulated partner in the crypto industry.