The biggest virtual bank in Hong Kong, ZA Bank, is said to be getting ready to support crypto-to-fiat exchanges and provide services for cryptocurrency accounts. The bank will act as a settlement bank, allowing token deposits at licensed exchanges to be withdrawn in Hong Kong dollars, Chinese yuan, and US dollars. Additionally, ZA Bank is offering account services to local crypto firms, following a successful trial in a regulatory sandbox that saw participation from approximately 100 firms.
Notably, ZA Bank's CEO, Ronald Iu, mentioned that clients from mainland China would not be offered the service due to the country's restrictions. Currently, currency conversions are offered by the only two licensed crypto exchanges in Hong Kong, HashKey and OSL, but ZA Bank aims to provide the same service at other exchanges once they become licensed.
This move comes at a time when US-based crypto firms are struggling to find local banking partners after the downfall of crypto-friendly banks such as Silicon Valley Bank, Silvergate Bank, and Signature Bank. ZA Bank's announcement offers a potential solution for these firms, both local and from abroad, who are seeking a path to make their operations work.
Hong Kong has been making efforts to establish itself as a crypto hub, with supportive regulations compared to the perceived hostility from US regulators. Chinese state-owned banks have also reportedly shown interest in catering to crypto firms moving to Hong Kong, either by offering banking services or making inquiries with them.
ZA Bank's move to provide crypto account services and facilitate exchanges is seen as a positive development for the crypto industry in Hong Kong and could potentially attract more crypto firms to the region. The availability of banking services and a favorable regulatory environment may position Hong Kong as an attractive destination for crypto businesses, especially as US-based firms face challenges in finding reliable banking partners.
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