The Canadian anti-money laundering agency, Fintrac, says it recorded official capital inflows originating from Hong Kong that totaled more than $34 billion in the past year. The outflows, which are the highest since 2012 when the earliest Fintrac records are available, â€œare the first evidence of a significant flight of capital overseas from the Asian financial hub following the security turmoil.â€
As detailed by one report, the cityâ€™s record capital transfers, which are â€œup 46 per cent from 2016 and 10 percent from 2019, came in a year when Hong Kong police froze the accounts of several people linked to pro-democracy protests.â€ This freezing of bank accounts, in turn, triggered â€œconcerns among some residents about asset safety.â€
Meanwhile, Darren Gibb, a spokesman for Fintrac suggests that some of the fleeing Hong Kong residents could be using cryptocurrencies to move funds ashore. He said:
In addition to the anti-money laundering agency, the report also quotes one Canadian bank executive who claims to have seen â€œa remarkable increase in balances in existing accounts linked to Hong Kong phone numbers.â€ The executive adds:
Hong Kong Denies Capital Flight Reports
Meanwhile, a Canadian lawyer, Jean-Francois Harvey, who is based in Hong Kong similarly confirms seeing â€œa five-fold increase in clients seeking to move to Canada since mid-2020.â€ According to the lawyer, his clients have transferred at least $0.8 million and, more commonly, between $4 million and approximately $8 million in the last 12 months.
However, the same report still acknowledges that the reported â€œoutflows represent only 1.9 per cent of Hong Kongâ€™s total bank deposits in 2020.â€ For its part, the government in Hong Kong says â€œthe city has not seen significant capital outflows since the anti-government unrest first began in 2019.â€ In addition, the Hong Kong Monetary Authority says the city â€œcontinues to receive inflows on a net basis, with total deposits growing by 5.4 per cent in 2020 to $1.9 trillion.â€
In the meantime, the report states that the British government is also expecting that â€œas many as 321,600 Hong Kong residents will migrate there over the next five years, with almost half of those in 2021.â€
Do you agree that capital outflows from Hong Kong will be much higher if crypto-based transfers are included? Tell us your views in the comments section below.
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