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Hong Kong’s ZA Bank, a unit of China’s ZhongAn Online P&C Insurance, is reportedly exploring ways to offer virtual asset-related services after new regulations for digital assets launch in June.
To establish itself as a crypto hub, Hong Kong implemented a new regulatory framework for crypto exchanges last year. This required all exchanges operating within the city to submit applications for licenses by Feb. 2024. The competition is fierce, with 24 companies vying for these coveted licenses.
Approval from Hong Kong’s top financial watchdog, the Securities and Futures Commission (SFC), is highly sought-after, due to its reputation as a prestigious regulatory body.
Leveraging this interest, ZA Bank CEO Ronald Iu Man-chung told SCMP in a recent interview that the bank is actively preparing to launch virtual asset trading services for retail investors. However, specific details will be announced only after they finalize preparations, he said.
ZA Bank didn’t return Cryptonews’ request for comment by press time.
Hong Kong Cracks Down on Unlicensed Virtual Asset Exchanges
The bank’s foray into crypto comes amid a stricter regulatory landscape in Hong Kong. In February, the city’s securities watchdog, the SFC, issued a warning to crypto investors. It urged them to only use licensed platforms and to double-check the registration status of their chosen exchanges.
This warning coincides with a critical deadline for Hong Kong-based crypto exchanges. They had until Feb. 29 to submit license applications, or face closure by May 31. The SFC website reinforces this point with a clear message: unlicensed exchanges must cease operations by the end of May.
Hong Kong Reboots Crypto Ambitions with ETFs, Regulatory Reform
The SFC has also advised investors to move their digital assets to platforms that are already regulated or in the process of obtaining a license. Currently, only OSL Digital Securities and Hash Blockchain hold licenses for virtual asset trading in Hong Kong. However, there are 24 applicants vying for approval, including names like OKX, HKVAX, Bybit, and DFX Labs.
The SFC will also reveal a list of approved and rejected applications for virtual asset trading platforms on a public registry by June 1, 2024.
The regulator also recently greenlit Asia’s first exchange-traded funds (ETFs) directly tied to Bitcoin and Ether. These ETFs began trading on the Hong Kong Stock Exchange on Tuesday.
Hong Kong’s crypto standing took a hit in mid-2022 due to a lack of clear regulations and the rise of competitor hubs like Singapore and Dubai, known for their crypto-friendly stance. However, the city is making a comeback.
ZA Bank’s Ronald Iu, highlights the bank’s commitment to supporting the digital asset sector, including Web3 startups, as Hong Kong ramps up digital asset trading through its new licensing program. This program, along with the lifting of the retail crypto trading ban in 2023, signals Hong Kong’s renewed push to become a major crypto hub.