ZA Bank from Hong Kong to facilitate Crypto-fiat Conversions

• In collaboration with licensed crypto exchanges HashKay and OSL, ZA Bank facilitates crypto-fiat conversion in Hong Kong. 
• Hong Kong’s SFC will bring a new licensing regime in June 2023. 

Hong Kong’s giant ZA Bank is to offer conversion from crypto to fiat in collaboration with HashKay and OSL. These two are the only licensed crypto exchanges based in Hong Kong and would allow their users to withdraw the crypto deposits in fiats like U.S. Dollar, Chinese Yuan, and Hong Kong Dollar. 

Hong Kong Making Waves in the Asian Crypto Industry

Speaking to the media, Ronald Iu, ZA Bank’s Chief Executive Officer, said that more exchanges would be roped in as and when they get licensed in Hong Kong. The facility of smooth conversion of crypto to fiat would be available only to the resident of the Fragrant Harbor. 

Mainland China has banned cryptocurrency trading, so its citizens cannot access this facility. 

ZA Bank is the first licensed virtual bank in Hong Kong; it is also the biggest in customer deposits, currently valued at around $900 Million as of June 2022. It is backed by ZhongAN Online P&C Insurance Co., which also is an online-only insurance company with its base in mainland China. 

Its founders’ list includes Tencent, the technology giant responsible for China’s famous and dominant social media platform, WeChat, and Ant Group, the owner of the country’s leading online payment platform Alipay. 

HK’s Dream to Become a Global Digital Asset Hub

Hong Kong has already revealed its plans to be a digital asset industry by laying out a licensing regime for the virtual asset service providers, supposed to take effect in June 2023. City Officials say nearly 80 crypto firms have set up businesses in Hong Kong. 

The Hong Kong Monetary Authority and the city’s Central Bank will soon host a meeting between the crypto companies and bankers on April 28 to provide liquidity in the digital assets industry. This initiative from Hong Kong contradicts the situation where the U.S. Crypto companies are scrapping the barrel to find banking partners, as central crypto-friendly banks recently collapsed, creating a banking crisis in the nation. 

The Securities and Futures Commission (SFC) of Hong Kong brought a new licensing regime effective from June 1. It would require all the centralized virtual asset trading platforms operating in Hong Kong or actively marketing to its citizens must be licensed by the SEC. 

The proposed regulatory requirement for the platforms trading in digital assets is based on the existing regime under the Securities and Futures Ordinance. The rules can be compared to licensed securities brokers and automated trading venues. The SFC has also suggested some modifications to the existing regime. 

Furthermore, the SFC is reviewing whether the licensed platform can serve retail customers, and if so, the SFC will have to implement strict investor protection protocols and measures. These include the suitability of onboarding clients and token admission. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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