Report: Hong Kong Virtual Bank to Enable Crypto Conversions and Accounts

Updated: 12 April 2023

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What – ZA Bank, Hong Kong’s largest virtual bank, is significantly moving into the crypto industry.
Why – it is positioning itself as the bridge between digital assets and fiat currencies.
What Next – On April 12, the bank announced its entry into the crypto market, allowing transfers and conversions between cryptocurrencies and fiat currencies.

In addition, the ZA bank, launched in 2018, will also offer account services for Hong Kong’s expanding crypto sector. Ronald Iu, the CEO, has revealed that ZA Bank will enable token-to-fiat currency conversions over licensed exchanges and facilitate as a “settlement bank” for clients.

The latest announcement from Hong Kong’s premier virtual bank will allow withdrawals in Hong Kong, China, and US currencies once the clients deposit their crypto tokens with exchanges.

Facilitating Crypto Clients with Banking Services

Per Ronald Lu, the bank has partnered with the only two licensed digital asset exchanges in Hong Kong, namely HashKey and OSL. Regarding this collaboration, he further said:

“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 taking its commitment to the crypto sector further by offering online accounts specifically for local crypto and Web3 startups. According to Devon Sin, the co-head of retail banking, it has conducted trials in a regulatory sandbox with around 100 firms onboarded. The bank has linked up with the city’s company registry data to minimize information input and cross-checking. However, ZA Bank will only engage with licensed exchanges and carry out AML procedures to meet regulatory requirements.

It’s worth noting that ZA Bank will not be providing crypto services to mainland Chinese retail customers due to the restrictions imposed by the regime on crypto trading.

While banks in the West are not typically fond of digital assets and tend to shy away from offering banking services to crypto companies, the outlook in Asia is more optimistic. As reported by BeInCrypto earlier this week, multi-million dollar venture funds have been launched, targeting Asian crypto startups.

ZA Bank to Launch Online Accounts Tailored for Web3 Projects

According to market data, ZA Bank is currently the largest virtual-only bank in Hong Kong, serving over 50% of virtual bank customers and holding total assets exceeding $760 million.

The bank’s CEO recently announced the expansion of its services to include accounts suited for small and medium-sized blockchain enterprises, as well as Web3 startups, in addition to its existing crypto-to-fiat conversion service. The announcement is a testament to the bank’s dedication to supporting emerging technologies and promoting innovative businesses in the digital space.

Lu, the CEO of ZA Bank, believes that launching online accounts for Web3 startups is a significant milestone in bridging traditional banking services with the Web3 world as Hong Kong works to establish a Web3-friendly environment. According to Bloomberg’s report, over 100 firms have already utilized this service after undergoing testing in a regulatory sandbox.

Hong Kong Makes Further Inroads into the World of Cryptocurrency

Thanks to its crypto-friendly policies, the Hong Kong government has become a magnet for key players in the blockchain space, transforming the region into a global crypto hub despite the recent turmoil that has befallen the $1 trillion crypto industry.

With regulatory crackdowns underway in the US and China’s ban on cryptocurrencies, Hong Kong’s positive reception of the crypto world has become all the more significant.

In April, the Hong Kong government established the Web3 Association. The association comprises several key industry stakeholders and members of the legislative council. Its goal is to drive the sustainable development of Web3 in Hong Kong through various strategies, including data monetization, asset tokenization, and the promotion of digitization in traditional businesses and industries.

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