Hong Kong’s ZA Bank Offers Reserve Bank Services for Stablecoin Issuers

CryptoNews.com

2024-07-19 02:45:35

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Sujha Sundararajan

Last updated:

July 19, 2024, 06:45 EDT | 1 min read

Hong Kong virtual bank, ZA Bank, on Friday, announced the roll out of reserve bank services for stablecoin issuers. The bank noted that it is negotiating partnership with nearly 10 stablecoin firms.

ZA Bank, the largest virtual bank in Hong Kong, announced that it will provide reserve bank services for stablecoin issuers and is currently negotiating cooperation with nearly 10 stablecoin companies. The HK government requires cryptocurrency stablecoin issuers to deposit…

— Wu Blockchain (@WuBlockchain) July 19, 2024

Per a local report, among the latest list of sandbox participants announced by the Hong Kong Monetary Authority (HKMA), stablecoin issuer Yuancoin has become one of the first members to participate.

According to Yao Wensong, CEO of ZA Bank, the service combines traditional banking industry with financial technology innovation.

“The company’s partnership with Yuancoin symbolizes a shared commitment to promoting innovation and enhancing the stability of digital assets.”

The move marks ZA Bank to be the first virtual banking trailblazer to offer innovative banking services for stablecoin issuers.

By providing a secure and reliable banking infrastructure with greater security for users, the virtual bank aims to build trust and confidence in the stablecoin market.

Further, the recent regulatory framework by the HKMA, mandates stablecoin issuers to deposit reserve assets in local banks. The ZA Bank’s rollout aligns with the regulator’s initiative.

The announcement comes at a time when there is growing stablecoin adoption among Hong Kong nationals, who use them for daily transactions. Besides, there has been a surge in the number of stablecoin issuers operating within the country.

ZA Bank Offers Crypto-Fiat Conversion Over Licensed Exchanges

In April 2023, the Hong Kong-based virtual bank announced facilitating exchange services between cryptocurrency and legal tender through licensed exchanges.

ZA Bank will act as a settlement bank for clients to allow withdrawals in Hong Kong, China and US currencies after they deposit crypto tokens with exchanges, the bank noted at the time.

ZA Bank, launched officially in March 2020, is one of Hong Kong’s eight licensed virtual banks. It had amassed the most in terms of net assets.

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