Hong Kong’s largest virtual bank, ZA Bank, has<a href="https://www.scmp.com/tech/tech-trends/article/3216740/hong-kongs-za-bank-offers-crypto-conversions-accounts-citys-push" rel="nofollow noopener" target="_blank"> </a>announced that it will be expanding into the crypto market, providing account services for the city&#8217;s digital asset sector. 



The bank will offer token-to-fiat currency conversions over licensed exchanges, allowing customers to deposit crypto tokens with exchanges and withdraw in Hong Kong, <a href="https://www.cryptopolitan.com/china-ambitious-plan-to-manage-ai-services/" data-type="post" data-id="288685">China</a>, and US currencies. 



ZA Bank will also act as a settlement bank for regulated web3 companies in Hong Kong, a category of businesses widely underserved by traditional financial institutions.



<h2 id="hong-kong-8217-s-push-into-the-crypto-sector">Hong Kong&#8217;s push into the crypto sector</h2>



Hong Kong&#8217;s financial sector has been struggling to revive itself after years of political upheaval and Covid restrictions. However, the city is going against the current by opening up to the digital asset sector, seeking to position itself as a crypto-friendly alternative to other hubs like the US and Singapore. 



The city is planning to roll out a revamped virtual asset exchanges framework on June 1 that allows exchange operators to open to retail investors.



Despite this, access to banking has been a significant hurdle for the city&#8217;s ambitions. The recent collapse of Silicon Valley Bank has further eroded banking access for many crypto firms, as traditional banks have been reluctant to provide services due to strict know-your-customer and anti-money-laundering rules.



To address this, ZA Bank has offered online accounts opening for local web3 start-ups and small-medium enterprises following a trial in a regulatory sandbox that onboarded some 100 firms. 



The bank linked up to the city&#8217;s company registry data, allowing for minimal information input and cross-checking. ZA Bank currently only plans to engage licensed exchanges and conducts AML scrutiny against the usual checklists to satisfy regulatory requirements.



<h2 id="a-bit-about-za-bank">A bit about ZA Bank</h2>



Launched in March 2020, ZA Bank is one of Hong Kong&#8217;s eight licensed virtual banks and has amassed the most in terms of net assets while remaining unprofitable as of last year. 



The virtual lender does not expect it will need to boost its headcount to handle the crypto client push. ZA Bank&#8217;s revenue model remains uncertain, with its CEO stating that &#8220;more clients, more deposit, more business opportunity is always great for the bank.&#8221;



While ZA Bank is currently only engaged with two licensed exchanges, HashKey and OSL, the lender plans to provide the same service for other exchanges as they become licensed. 



Additionally, ZA Bank will be settling transactions for more crypto exchanges as more companies apply to obtain digital assets permits from the Hong Kong authorities.

Hong Kong’s biggest virtual bank takes a leap into crypto: Details

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