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Chinese internet giant, Tencent has been granted a license to operate a “blockchain bank,” by Hong Kong’s Monetary Authority, which is responsible for maintaining the city's monetary and banking stability. The announcement was made today, at the Wuzhen blockchain conference in China, by Weige Cai , general manager for blockchain at Tencent.
In a keynote speech at the conference, Cai said simply that "Tencent Virtual Bank has obtained a Hong Kong license and is currently preparing a blockchain virtual banking team."
Few further details were given, however Chinese media hailed the announcement as bullish for the cryptocurrency industry. It follows news, on Wednesday, that Hong Kong's financial regulator is introducing licenses for cryptocurrency exchanges. The new rules relate to platforms offering virtual securities.
Tencent has long been active in blockchain innovation. It’s the parent company of leading Chinese social media platform, WeChat and operator of its payment system. It’s also a company favored by the Chinese authorities, who have championed Tencent’s research programs.
Tencent is one of several mainland entities hoping to tap into Hong Kong’s $15 billion virtual banking market, which offers similar services to traditional banks but at a lower cost.
In mainland China, Tencent-backed virtual bank WeBank is serving more than 60 million customers since launching five years ago.
But the launch of Tencent's virtual blockchain bank might prove a key test of hostility towards mainland businesses in the febrile environment of Hong Kong, where there is rising concern about sharing information with Chinese corporations.
Analysts at MICA Research, a cryptocurrency research startup, warned that China's central bank served as the clearing platform for WePay, Taiwanese news site Blockcast.it reported. The analysts were sceptical about the use of "virtual banking licenses" to operate "blockchain virtual banks.” They also suggested that Tencent may be responding to China’s new national policy of championing innovation in blockchain technology.
And indeed, Cai echoed the mantra of the Chinese President Xi Jinping, when he referred to blockchain as an key enabling technology, which can be integrated with the Internet of Things and AI.