Hong Kong monetary authority (HKMA) laid out a clear statement in it's press release which aims to address it's citizens to watch out for some so called financial crypto companies that purport themselves as "crypto asset banks", "digital asset bank," "digital bank" and "trading bank." Hong Kong which aiming to be one of the leading crypto hub country embracing the emerging blockchain technology, have been a crypto friendly country accommodating digital asset technologies lately, although its regulatory policies against cryptocurrencies have not yet been very flexible for major crypto ventures to delve into its country to expand blockchain adoption for it users.
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The monetary regulator have laid out precisely what investors are to watch out for according to HKMA any financial providing services company must be well licensed and given banking ordinance before it can be recognized by the country to carry out financial services to citizens.
The word deposit and banking are strictly for financial based recognized institutions thereby investors must refrain from associating with any crypto company that describes their product as deposit or banking, in general HKMA wish to inform the entire public that crypto firms are not banks in Hong Kong and only companies recognized by HKMA are licensed to carry out financial services users who engage with such so called firms are fully responsible for any investment damage.
Centralization playing a major role
HKMA press release indirectly points out clearly that decentralization could be far from becoming reality long term, although Hong Kong is becoming crypto friendly by the day, it is still not clear how it financial services want its citizens to view crypto investments in term of being a legal tender utility assets for investment and daily purchases in the country.
Since cryptocurrencies to centralized authorities are tracked with records of being used as a medium for fraudulent activities all citizens best interest for HKMA is to protect them from falling prey or victim of exit scam which are common in crypto space, to minimize losses any crypto project which aim to fully operate in the country must be fully licensed by HKMA this is to protect users funds investments in near future against exit scam projects.
With centralized authority keep seeking channel to regulate the idea of decentralization there can't be fair play room for decentralization to reach it full potential, in reality decentralization can't operate to it's full potential without attracting centralized users at some point we were all centralized inclined until the idea of decentralization start becoming popular, we could be looking at long term struggle for decentralized space to be fully operational in this present financial system.
HKMA isn't the only financial regulator that doesn't recognize crypto based companies aren't banks, while decentralization don't require licensing which isn't the ethos of centralization HKMA have clearly stated out their requirements for crypto companies to be recognized as financial services they must be first subjected to centralization.
Decentralization ain't centralized banks
To digress further crypto firms in reality shouldn't be directly what centralized banks hold, it offers fair share with right ownership for collective investors, a space hosted on decentralized server an open source gateway payment system with a borderless or no regional restriction transaction processing for everyone to access.
Well it seems HKMA are right to ascertain crypto companies aren't centralized banks this all goes down to what type of assets those said companies are offering to investor if a company claims to be decentralized and requires users data it's no different from being a centralized company.
Going forward crypto based companies who wish to run a smooth operating service in Hong Kong must strictly abide by rules governing the country's financial system which mean there can't be full centralization for any company looking to host a full decentralized service within HKMA region.