Global Banks Reportedly Limit Service in Hong Kong for Political Reasons
Major international banks like Credit Suisse and HSBC are reportedly scrutinizing their Hong Kong clients amid the ongoing protests over China-backed national security law.
According to a July 19 report by Reuters, global banks including Credit Suisse, HSBC, Julius Baer, and UBS are now screening their clients in Hong Kong on potential ties to the city’s pro-democracy movement.
Social media spies
Citing a group of anonymous people familiar with the matter, the report says that the banks are scanning clients’ records for political and government ties in order to impose additional diligence requirements. The records include comments made by clients and their associates in public and media, as well as recent social media posts, the report notes.
The banks are reportedly looking to apply major service limitations to accounts associated with so-called “politically exposed persons.”
The report reads:
"The designation, called politically exposed persons, can make it more difficult or altogether prevent people from accessing banking services, depending on what the bank finds about the person’s source of wealth or financial transactions."
Swiss and British banks appear to support the law, while their governments stand against it
On June 30, Chinese President Xi Jinping signed the national security law — an initiative that is aimed to prohibit “secession, subversion of state power, terrorism activities and foreign interference.” According to reports, the initiative is threatening to curb free speech and protests in Hong Kong as well as undermine the country’s autonomy.
After being handed over from the United Kingdom to China back in 1997, Hong Kong was promised to be governed under the “one country, two systems” approach. This framework was designed to provide Hong Kong with more freedoms than some other cities in China, making the city able to operate in a different legal and economic system than China.
As the global community moved to protect the freedom of the former British colony, 26 countries including the U.K. and Switzerland subsequently called on the Chinese and Hong Kong governments to “reconsider the imposition of this legislation.” While the global authorities are standing against the initiative, the Swiss and British banks like Credit Suisse and HSBC are apparently not concerned about the autonomy of Hong Kong, according to latest reports.
British banks like HSBC and Standard Chartered have expressed support of the national law, reportedly claiming that it would restore stability in Hong Kong. According to some executives, HSBC had little real choice in this situation, as it makes most of its profits from Hong Kong.
Crypto vs traditional banking system in terms of political freedom
The latest report clearly demonstrates the apparent flaws in the traditional banking system when it comes to protecting freedom and democracy. Despite the use of cryptocurrencies like Bitcoin (BTC) being globally subject to Anti-Money Laundering and Know Your Customer laws, crypto’s very idea of decentralization does not fit well with the ideals of authoritarianism.
Emerging in 2009, Blockchain technology quickly became a symbol of greater financial freedom. Major global organizations, like the Human Rights Foundation, are actively exploring the use of crypto to help global activists protect human rights around the world.