Hong Kong Bank Welcomes Stablecoin Issuers

Crypto News– In a bid to hasten the adoption of Web3 technologies locally, ZA Bank in Hong Kong has revealed its plan to provide specialized banking services tailored for stablecoin issuers.

Hong Kong Bank Welcomes Stablecoin Issuers

As announced on April 5, the virtual bank based in Hong Kong will extend security measures for fiat reserves, allowing issuers to utilize them as backing for digital assets.

Furthermore, stablecoin issuers will gain access to a range of banking services, including fund transfers, payroll management, and diverse deposit options.

In general, stablecoins uphold their value by requiring the issuer to securely hold an equal amount of fiat currency, like dollars, in reserves. This guarantees that stablecoin holders can consistently exchange their stablecoins for an equivalent sum of the underlying fiat currency.

However, securely managing these reserves has proven challenging for stablecoin issuers, impeding broader adoption and highlighting a significant need within the larger Web3 community.

With these new services, we’re directly addressing the unique challenges faced by stablecoin issuers, ultimately promoting growth and stability within the Web3 economy.

Devon Sin

ZA Bank has actively immersed itself in Hong Kong’s burgeoning Web3 landscape. In 2023, it reported a transfer volume of over $1 billion from clients in the Web3 sector.

In May 2023, the bank announced its initiation of retail virtual asset trading in the administrative region, following the Hong Kong Securities and Futures Commission’s (SFC) decision to accept retail virtual asset trading platform (VATP) license applications.

Reportedly, the bank has already captured more than 80% of the client banking requirements of VATPs in Hong Kong.

Additionally, it has facilitated the onboarding of over 100 Web3 companies as part of its efforts to drive local adoption.

In December 2023, the Hong Kong government proposed mandatory licensing for stablecoin issuers, as outlined in a consultation paper from the Financial Services and the Treasury Bureau and the Hong Kong Monetary Authority.