Hong Kong’s ZA Bank has announced that it will provide specialized banking services for stablecoin issuers to boost Web3 adoption.
The virtual bank, with its headquarters in Hong Kong, said on April 5 that it protects fiat reserves, allowing issuers to use them to support digital assets.
Additionally, issuers of stablecoins will have access to banking services like different deposit options, payroll administration, and fund transfers.
ZA Bank’s interim chief executive, Devon Sin, stated that the organization had “unwavering support” for the Web3 community.
“With these new services, we’re directly addressing the unique challenges faced by stablecoin issuers, ultimately promoting growth and stability within the Web3 economy.”
Stablecoins often require the issuer to have an equivalent quantity of fiat money, like dollars, as fiat reserves for them to retain their value. This guarantees that owners will always be able to exchange their stablecoins for the same amount of fiat money.
Stablecoin issuers have needed help safely maintaining these reserves, which has impeded wider acceptance and created a significant need in the larger Web3 ecosystem.
ZA Bank has been making a concerted effort to become more involved in the emerging Web3 scene in Hong Kong. It reported more than $1 billion in customer transfers in the Web3 domain in 2023.
One day after the Hong Kong Securities and Futures Commission (SFC) declared it would start accepting applications for retail virtual asset trading platform licenses, it stated in May 2023 that it would begin providing retail virtual asset trading in the administrative region.
Since then, the bank has stated that it has fulfilled more than 80% of the Virtual Asset Trading Platform (VATP) in Hong Kong’s client banking requirements.
To promote local adoption, it claimed to have worked with more than 100 Web3 enterprises to onboard them.
In December, the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) released a consultation document announcing that the government of Hong Kong would require stablecoin issuers to seek licenses.
Every stablecoin in circulation must have reserves “equal to the par value” to meet the requirements for acquiring such a license.
