Banks in Hong Kong Testing the Waters of Cryptocurrency

Hong Kong’s largest virtual bank, ZA Bank, plans to enter the cryptocurrency market by becoming the bridge between digital assets and fiat currencies. The bank offers transfers and conversions from cryptocurrencies and fiat currencies, as well as account services for Hong Kong’s expanding crypto sector. ZA Bank plans to offer token-to-fiat currency conversions over licensed exchanges and 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 will only engage with licensed exchanges and conduct anti-money laundering procedures to satisfy regulatory requirements. However, it will not offer crypto services to mainland Chinese retail customers due to the regime’s restrictions on crypto trading. Hong Kong aims to become a regional crypto hub by rolling out a regulatory framework in June, but that framework is highly restrictive, and listed tokens need background checks on the issuers and developers.