ZA Bank, the largest virtual bank in Hong Kong, has announced an initiative to offer exclusive reserve bank services to stablecoin issuers, integrating traditional banking with cutting-edge financial technologies.
The most recent regulatory framework requires cryptocurrency stablecoin issuers to deposit reserve assets in local institutions. This is a substantial stride toward establishing a more secure and stable digital asset market.
Local media reported that ZA Bank today affirmed its status as the first digital bank in Hong Kong to offer these services, a significant advancement in the convergence of financial technology innovation and traditional banking.
About the Reserve Bank Services
It is imperative that established financial institutions, such as ZA Bank, provide robust reserve bank services to ensure the stability and reliability of stablecoins as they become more and more essential to the global financial system.
The Hong Kong Monetary Authority (HKMA) has recently disclosed the most recent sandbox participant list, which includes Yuancoin, which is collaborating with ZA Bank.
ZA Bank has appointed Yuancoin as its first stablecoin issuer to utilize these reserve bank services, thereby emphasizing a substantial partnership to promote innovation and improve the stability of digital assets.
Yao Wensong, CEO of ZA Bank, emphasized the importance of offering banking services to stablecoin issuers, asserting that it combines traditional banking with fintech innovation. Additionally, he stated that their collaboration with Yuancoin illustrates a mutual dedication to improving digital asset stability and promoting innovation.
Sync with HKMA Policies
The bank is currently in discussions with approximately ten additional stablecoin companies, which suggests the possibility of future initiatives and partnerships. The bank has endorsed the HKMA’s policies and is optimistic about the upcoming sandbox stage developments.
ZA Bank has been making significant progress in capitalizing on the flourishing Web3 market in Hong Kong, facilitating more than $1 billion in transactions for Web3 clients in 2023.
Just one day after the Hong Kong Securities and Futures Commission (SFC) announced that it would begin accepting license applications for retail virtual asset trading platforms (VATPs) in May 2023, it disclosed its intentions to establish retail virtual asset trading services in the region.
Since entering the retail virtual asset trading market, the bank has secured over 80% of the client banking market share for VATPs in Hong Kong.
On July 15, the Hong Kong Securities and Futures Commission added seven unlicensed cryptocurrency trading platforms to its alert list, citing concerns regarding the unauthorized operation of these platforms and the safety of investors.
