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FameEX Hot Topics | Largest Virtual Bank in Hong Kong Now Provides Cryptocurrency Conversion Services

2023-04-17 16:38:50

Hong Kong's first and largest virtual bank, ZA Bank, is planning to provide services to cryptocurrency exchanges licensed in Hong Kong. The bank, co-founded by Chinese billionaire Ou Yaping, intends to facilitate transfers of digital and fiat currencies for participants in the city's developing crypto sector, according to CEO Ronald Iu. ZA Bank will act as a settlement bank for clients who deposit digital coins to the trading platforms and want to withdraw Hong Kong and US dollars or Chinese yuan, offering crypto-to-fiat currency conversions through licensed exchanges. The bank is already working with the two authorized crypto exchanges in Hong Kong, Hashkey and OSL, and plans to offer the service to others as more platforms obtain a license to operate in China's special administrative region.

ZA Bank's move comes as Hong Kong seeks to revive its status as a global financial center and become a hub for the crypto market. Despite recent troubles, the region has been opening up to the crypto space in a post-pandemic world. Hong Kong authorities are working to revamp the legal framework for cryptocurrency exchanges to allow them to open to retail investors, and financial regulators are taking steps to improve access to banking services for crypto companies. ZA Bank plans to engage only with licensed digital asset exchanges and is conducting anti-money laundering (AML) checks in compliance with existing requirements.

There are signs that Hong Kong's push into the crypto market has the support of Beijing, despite the crackdown on crypto activities in mainland China. State-owned Chinese banks are reportedly ready to serve crypto companies in Hong Kong, and one of China's largest insurers backed the launch of two crypto-focused funds in early April. For ZA Bank, the move to provide services to cryptocurrency exchanges licensed in Hong Kong is aimed at facilitating transfers of digital and fiat currencies and offering a path for interested firms, big or small, from abroad and local, to make things work. The virtual bank is also opening online accounts for Web3 startups and other small and medium enterprises, with around 100 such companies having access to its services following a trial in a regulatory sandbox.

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