Hong Kong’s ZA Bank, which is the largest virtual bank in the city, has announced its plans to expand into the cryptocurrency market by offering services for digital assets. The bank will enable token-to-fiat currency conversions over licensed exchanges and act as a settlement bank for clients to allow withdrawals in Hong Kong, China, and US currencies after they deposit crypto tokens with exchanges. This business model is already operational with HashKey and OSL, the only two currently licensed crypto exchanges in Hong Kong, and the bank intends to provide the same services to other exchanges as they become licensed.
“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,” said Iu.
The move is significant because Hong Kong is opening up to the beleaguered crypto sector despite years of Covid restrictions and political upheaval. Access to banking has been a major hurdle for the city’s ambitions, and the banking and securities regulators are hosting a roundtable for crypto players and bankers later this month to discuss banking services. Hong Kong plans to roll out a revamped virtual asset exchanges framework on June 1 that allows exchange operators to open to retail investors. The city is seeking to revive its status as a financial center by pushing into transfers of crypto and fiat currencies and providing account services for the digital asset sector.
