The biggest online bank in Hong Kong is taking a giant leap into the crypto sector. It plans to become the bridge between digital assets and fiat currencies.
On April 12, it was reported that ZA Bank was entering the crypto market. The largest virtual bank in Hong Kong will be offering transfers and conversions from crypto and fiat currencies.
The digital bank launched in 2020 will also provide account services for Hong Kong’s rapidly expanding crypto sector.
According to CEO Ronald Iu, ZA Bank will offer token-to-fiat currency conversions over licensed exchanges. He added that the bank will act as a “settlement bank for clients to allow withdrawals in Hong Kong, China, and US currencies after they deposit crypto tokens with exchanges.”
Banking Services For Crypto Clients
Furthermore, the only two currently licensed digital asset exchanges in Hong Kong, HashKey and OSL, will be cooperating with ZA Bank. Iu commented:
“For the dozen of interested firms, big or small, from abroad and local, top of their concern is to have a path to make things work,”
ZA Bank is offering online accounts for local crypto and Web3 startups. Additionally, it conducted trials in a regulatory sandbox that onboarded around 100 firms.
According to the co-head of retail banking, Devon Sin, the bank linked up to the city’s company registry data, allowing for minimal information input and cross-checking.
However, the bank only plans to engage with licensed exchanges. It will also conduct AML procedures to satisfy the regulatory requirements.
ZA Bank will not be offering crypto services to mainland Chinese retail customers due to the regime’s restrictions on crypto trading.
One of the biggest problems crypto companies in the West have is access to banking services. Banks simply do not like crypto and do not want their customers accessing digital assets.
The outlook in Asia is a little more forward-looking in this respect.
Earlier this week, BeInCrypto reported on the launch of multi-million dollar venture funds targeting Asian crypto startups.
Hong Kong Forwards, America Backwards
Hong Kong aims to become a regional crypto hub by rolling out a regulatory framework in June. However, that framework is highly restrictive, with listed tokens needing background checks on the issuers and developers.
Licensed crypto exchanges would also be barred from market-making activities and would require insurance to cover any potential risks.
Furthermore, this week the Hong Kong Security and Futures Commission said that DeFi projects would also have to be fully regulated.
Meanwhile, across the pond in the U.S., there is still no sign of any official crypto regulations, just increased contempt for the fledgling industry.
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