Attached. Please let me know if you have any questions or need revisions.Running Head: BITCOIN AND BANKING SYSTEM IN HONG KONGBitcoin and Banking System in Hong KongNameInstitutionAuthors Note1Bitcoin and Banking System in Hong Kong2Banking and Monetary System in Hong KongThe banking system is based on acting as an intermediary between savers and investors.Banks act as a reservoir for the accumulated savings of a given country. Hong Kong has over 100banks and 29 multinational banks. Having an elaborate banking system ensures that thegovernment has financial stability. Hong Kong Monetary Authority (HKMA) functions to regulateand oversee the banking businesses with the ultimate goal of promoting stability and integrityamong the economic systems. In Hong Kong, banks provide deposit-taking services, offerinsurance covers, lend their clients, and invest in the investment matrix. The HKMA conductsoversights periodically to ensure the banking system has adequate capital, manages their credit, issafe from liquidation, and their money-laundering is achieved legally. Once HKMA ensures theobjectives are met, the customers who deposit with them are also safeguarded from any form ofscamming.HKMA ensures that their regulations are reviewed periodically so that the banking systemsare regulated most of the time. It also implements global banking paradigms to conform to theworldwide banking trajectories. The resolute authority of HKMA is to provide the public withconfidence in the banking system within Hong Kong. This is the reason behind Hong Kong’s threetier system. The three forms of banking are licensed banks, deposit-taking banks, and restrictedlicensed banks. Only the licensed and the restricted licensed banks can operate with a full capacityof a bank.Roles and functions of the central banksAs the Hong Kong de-facto central bank, HKMA, which was established in 1993, controlsthe rate of inflation and maintains the Hong Kong dollar’s stability (HKD). KMA supports all theBitcoin and Banking System in Hong Kong3monetary policies by linking HKD with the U.S dollar to enable it to have stability in terms ofglobal value. Hong Kong is the capital city of China. It is also the place where multinationalcompanies thrive on setting up their headquarters. Hong Kong has an annual nominal GDP of $336billion as of 2019. HKMA being a de facto bank in the region maintains the commonwealth’ssovereignty within its boundaries. HKMA is an East Asian and Pacific Central Banking partner. Ithas reserves in the Reserve Bank of Australia, Bank of Japan, among other central banks. Theprimary role of HKMA is to maintain stability in the banking sector.HKMA links HKD and USD through a fixed-rate notation vector to maintain parity withUSD with cohabitated tightness, enabling HKD to release HKD noted when a similar amount ofUSD had been deposited. This exchange scheme enables the HKD and the USD to have someequilibrium, although there must be some fluctuations in the foreign exchange market. HKMAoperates as an exchange fund ontology. The exchange fund affects the value of the currency ofHong Kong. The HKMA can use the exchange fund paradi…
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