Major world banks limit their operations in Hong Kong for political reasons
Major international banks such as Credit Suisse and HSBC are investigating their Hong Kong clients amid ongoing protests over the Chinese-backed national security law.
According to a Reuters report on July 19, global banks including Credit Suisse, HSBC, Julius Baer and UBS are now assessing their clients in Hong Kong on possible links to the city’s pro-democracy movement.
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Spies on social networks
Citing a group of anonymous individuals familiar with the issue, the report says banks are scanning customer records for political and government ties to impose additional due diligence requirements. The records include comments made by customers and their associates in public and media, as well as recent postings on social networks, the report says.
According to the reports, banks are seeking to apply significant service limitations to accounts associated with so-called „politically exposed persons.
The report says:
„The designation, which targets politically exposed persons, could make it difficult or impossible for customers to access banking services, depending on what the bank finds about the person’s source of wealth or financial transactions.
Swiss and British banks seem to support the law, while their governments oppose it
On June 30, Chinese President Xi Jinping signed the National Security Law, an initiative that aims to prohibit „secession, subversion of state power, terrorist activities and foreign interference. The initiative threatens to curb freedom of expression and protest in Hong Kong and to undermine the country’s autonomy, according to reports.
After being handed over from the UK to China in 1997, it was agreed that Hong Kong would be governed under a „one country, two systems“ approach. This framework was designed to give Hong Kong more freedoms than some other cities in China, allowing the city to operate in a different legal and economic system from China.
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As the global community moved to protect the freedom of the former British colony, 26 countries, including the United Kingdom and Switzerland, subsequently called on the governments of China and Hong Kong to „reconsider the imposition of this legislation. While global authorities are opposed to the initiative, Swiss and British banks such as Credit Suisse and HSBC are apparently not concerned about Hong Kong’s autonomy, according to the latest reports.
British banks such as HSBC and Standard Chartered have expressed support for the national law, claiming it would restore stability to Hong Kong. According to some executives, HSBC had little real choice in this situation, as it gets most of its profits from Hong Kong.
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Crypto vs. Traditional Banking System
The latest report clearly demonstrates the apparent flaws in the traditional banking system when it comes to protecting freedom and democracy. Although the use of crypto currencies such as Bitcoin (BTC) is subject to anti-money laundering and Know Your Customer (KYC) laws globally, the idea of decentralization in the crypto world does not fit well with the ideals of authoritarianism.
Emerging in 2009, Blockchain technology quickly became a symbol of greater financial freedom. Leading global organizations, such as the Human Rights Foundation, are actively exploring the use of cryptography to help global activists protect human rights around the world.