Hong Kong’s Largest Virtual Bank Offers Crypto Conversion Services

ZA Bank, Hong Kong’s biggest virtual-only lender, intends to expand its business into the region’s growing digital assets sector. The banking platform will offer crypto-to-fiat conversions and account services as the Chinese financial center is seeking to embrace the industry.

Hong Kong’s first and largest virtual bank, co-founded by Chinese billionaire Ou Yaping, is looking to facilitate transfers of digital and fiat currencies for participants in the city’s developing crypto sector, Bloomberg reported quoting the lender’s top executive.

According to CEO Ronald Iu, ZA Bank will offer crypto-to-fiat currency conversions through licensed exchanges, acting as a settlement bank for clients who deposit digital coins to the trading platforms and want to withdraw Hong Kong and U.S. dollars or Chinese yuan. Iu pointed out:

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.

According to the report, ZA Bank is already working with the two currently authorized crypto exchanges in Hong Kong, Hashkey and OSL. It intends to provide the service to others as more platforms obtain a license to operate in China’s special administrative region.

In a post-pandemic world, Hong Kong has been opening up to the crypto space, despite its recent troubles. With the goal of becoming a crypto hub, the city is seeking to revive its status of a global financial center.

There have been signs that Hong Kong’s push into the crypto market has the support of Beijing, despite the crackdown on crypto activities in the mainland. A report revealed in late March that state-owned Chinese banks are ready to serve crypto companies in the city. One of China’s largest insurers backed the launch of two crypto-focused funds in early April.

Hong Kong authorities are now working to revamp the legal framework for cryptocurrency exchanges in order to allow them to open to retail investors. The region’s financial regulators are also taking steps to improve access to banking services for crypto companies.

Currently, ZA Bank plans to engage only with licensed digital asset exchanges. It’s conducting anti-money laundering (AML) checks in compliance with existing requirements and has not had any AML issues over the past months, according to its Alternate Chief Executive Devon Sin.

The virtual bank is also opening online accounts for Web3 startups and other small and medium enterprises. Around 100 such companies have access to its services following a trial in a regulatory sandbox, the report detailed.

Do you expect Hong Kong to continue to improve access to banking services for crypto companies? Tell us in the comments section below.