Hong Kong-based ZA Bank plans to offer retail virtual asset trading in the administrative region. The bank announced its plan on May 24, one day after the Hong Kong Securities and Futures Commission (SFC) said it would start accepting retail virtual asset trading platform license applications.
The bank will partner with locally licensed virtual asset exchanges to obtain regulatory approvals, according to a statement. Bank customers will be able to “trade virtual assets by using fiat currency within the ZA Bank App” once those approvals are in place.
Virtual asset trading is part of the bank’s larger strategy, which will also include trading in United States stocks in the future, the bank said.
The SFC announced the opening of the application process along with the implementation of new guidelines for asset custody safety requirements, cybersecurity standards and the segregation of client assets, among other things. Those guidelines will go into effect in June. Most virtual asset trading platforms accessible to the public in Hong Kong are not now regulated by the SFC.
We’re thrilled to be a part of the @hkmagovhk ’s e-HKD Pilot Programme, partnering with @BCG , HKT Payment Limited, ZA Bank and @paywithglass to develop and evaluate the potential application of e-HKD in a secured lending product backed by tokenized real assets.#eHKD pic.twitter.com/b4biUAHdIo
— VSFG (@VSFGhongkong) May 23, 2023
The announcement of the new licensing procedure garnered considerable attention, receiving 152 comments during its consultation period. A subsidiary of the Chinese state-owned Greenland company has also applied for a virtual asset trading license in Hong Kong.
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ZA Bank — Hong Kong’s largest digital bank, controlled by Chinese internet insurer ZhongAn Online P&C Insurance — said of its plans:
“With this move, ZA Bank is set to support the Hong Kong SAR [Special Administrative Region] government’s vision to develop a vibrant sector and ecosystem for virtual assets.”
Hong Kong’s ascent in the virtual asset space can also be seen in the launch of the Hong Kong Monetary Authority’s digital Hong Kong dollar pilot project, which ZA Bank is also participating in, and in the emergence of tech accelerators and incubators there.
ZA Bank was reported in April to be preparing to act as a settlement bank for withdrawals of tokens from licensed exchanges in Hong Kong dollars, Chinese yuan and U.S. dollars.
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