ZA Bank offers crypto services

Hong Kong-based virtual bank ZA Bank is expanding its services to the city’s digital asset sector by offering token-to-fiat currency conversions over licensed exchanges. ZA Bank will act as a settlement bank for clients, allowing them to withdraw Hong Kong, China, and US currencies after they deposit crypto tokens with exchanges. Currently, this business model is operational with HashKey and OSL, the only two licensed crypto exchanges in Hong Kong, and ZA Bank will provide the same service for other exchanges as they become licensed.

Ronald Iu, ZA Bank’s CEO, said that the bank was providing an account service for the digital asset sector that would help clients overcome one of their biggest hurdles – access to banking. He also mentioned that the bank is offering online account openings for local Web3 start-ups and small-medium enterprises, following a trial in a regulatory sandbox that onboarded around 100 firms.

Hong Kong is looking to open up to the beleaguered digital asset sector, despite strict know-your-customer and anti-money-laundering rules. The city’s banking and securities regulators are hosting a round table for crypto players and bankers to share experiences and perspectives on banking services later this month. Hong Kong is planning to roll out a revamped virtual asset exchanges framework from June 1 that allows exchange operators to open to retail investors. This move comes after the recent collapse of Silicon Valley Bank, which has further eroded banking access for many crypto firms as traditional banks have been reluctant to provide services.

To satisfy regulatory requirements, ZA Bank conducts AML scrutiny against the usual checklists, and according to Devon Sin, alternate chief executive of ZA Bank, no AML issues have popped up over the recent months of work. ZA Bank is already engaging with crypto exchanges in Hong Kong, and as other exchanges become licensed, the bank plans to provide the same services. Ronald Iu believes that the bank’s service will help other firms in the sector by providing a path to make things work, especially those that are concerned about having access to banking services.