Hong Kong’s Largest Virtual Bank To Act as a “Settlement Bank” for Crypto Exchanges

Sahana Kiran
Source – Pixabay

Hong Kong’s crypto drive has been ascending without any major hurdles. It looks like all of the region’s digital asset sector plans are finally coming to fruition. The city’s largest virtual bank, ZA Bank in Hong Kong, is currently enabling fiat and cryptocurrency transfers while offering account services to the city’s expanding digital asset industry.

According to a recent report, ZA will facilitate withdrawals for clients in Hong Kong, China, as well as in U.S. currencies. This will be done after they deposit crypto assets into exchanges. Therefore, ZA will be serving as a settlement bank.

Following a pilot in a regulatory sandbox that onboarded about 100 organizations, ZA Bank is now providing online account openings for local Web startups and small-to-medium enterprises. According to Devon Sin, the substitute chief executive of ZA, the bank is connected to the city’s corporate register data, allowing for limited information entry and cross-checking.

It should be noted that ZA Bank was founded by Chinese billionaire Ou Yaping and others in March 2020. The entity is currently being led by CEO Ronald Iu. Furthermore, it is even deemed one of the largest virtual banks in Hong Kong.

Will ZA Bank be able to comply with Hong Kong’s regulations?

To better serve retail investors, Hong Kong plans to launch a revised framework for digital asset exchanges on June 1. ZA Bank aims to work with authorized organizations up until these rules take effect. Using established criteria, the bank has begun doing AML examinations. According to Sin, there haven’t been any AML issues at work in recent months.

Additionally, later this month, the city’s banking and securities regulators will conduct a meeting for crypto players and bankers. Through this, the regulator will be able to hear out the perspectives and experiences of these entities.

The latest service is not just provided by ZA Bank. Hashkey and OSL share a similar business structure, CEO Iu noted. In addition, ZA plans to offer the same service to exchanges whenever they are granted licenses in Hong Kong. He further added,

“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.”