ZA Bank in Hong Kong Explores Stablecoin Partnerships

ZA Bank, a digital bank in Hong Kong, is in talks with potential stablecoin issuers about opening accounts to hold the cash reserves backing these cryptocurrency tokens. This development was reported by Bloomberg, citing Devon Sin, the General Manager of Business Banking and lending at ZA Bank.

Sin evidenced that the company handles five to eight existing and prospective individual and corporate clients who would like to launch stablecoins. The Hong Kong Monetary Authority (HKMA) puts these customers into the regulatory sandbox, and ZA Bank maintains its fiat reserve accounts.

While at an interview, Sin focused on the implementations of stablecoins, including wholesale and retail markets, bank tokens, and overseas funds remittance. “What’s exciting for us is to find feasible solutions for the possible issuers of the e-CNY into an actual application,” Sin said.

Sin commented that ZA Bank is currently looking into providing custody services for virtual assets such as stablecoins, and they will assess the required network and setup.

ZA Bank Sends $1 Billion; Hong Kong Digital Hub Advances

Following a notable presentation to the Web3 sector by ZA Bank addressing concerns about limited banking services, Sin stated that the bank has facilitated transfers exceeding $1 billion from over 100 Web3 clients. Meanwhile, as of 2022, the eight virtual banks licensed in Hong Kong reported losses in their annual reports. However, according to Sin, ZA Bank aims to break even this year.

Hong Kong is actively working to establish a digital asset hub to revive its status as a prominent financial centre. Recently, the city granted licenses to its first cryptocurrency trading platforms under updated regulations. Last December, Hong Kong regulators disclosed their readiness to list spot crypto exchange-traded funds (ETFs).

Additionally, the HKMA is developing a framework for stablecoins pegged 1:1 to fiat currencies, typically backed by cash and bond reserves. Since last month, the HKMA has started accepting applications for trials concerning stablecoin issuance. As of April 3, no projects had commenced.

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