Reported Bloomberg, Hong Kong's ZA Bank is expanding its services to include transfers of crypto and fiat currencies, as well as providing account services for the digital asset sector. The bank will offer token-to-fiat currency conversions over licensed exchanges, acting as a settlement bank for clients to allow withdrawals in Hong Kong, China and US currencies after they deposit crypto tokens with exchanges. Currently, the business model is in operation with HashKey and OSL, the only two licensed crypto exchanges in Hong Kong. ZA Bank plans to provide the same service for other exchanges as they become licensed.
The move comes as Hong Kong seeks to become a crypto finance center and revive its status as a financial center following years of Covid restrictions and political upheaval. The city's banking and securities regulators will host a roundtable for crypto players and bankers to share experiences and perspectives on banking services later this month.
The recent collapse of Silicon Valley Bank has further eroded banking access for many crypto firms as traditional banks have been reluctant to provide services because of strict know-your-customer and anti-money laundering rules. ZA Bank is offering online accounts opening for local Web3 startups and small-medium enterprises, following a trial in a regulatory sandbox that on-boarded some 100 firms. The lender doesn't offer services for clients from mainland China given the restrictions in place there.
Launched officially in March 2020, ZA Bank is one of Hong Kong's eight licensed virtual banks and had amassed the most in terms of net assets while remaining unprofitable as of last year.
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Policy and Regulation