As the collapses of Signature Bank and Silvergate sent crypto companies scrambling, a virtual bank from Hong Kong is extending a warm welcome to web3 startups.
Hong Kong-based ZA Bank is now allowed to serve as the settlement bank for regulated web3 companies in the city, the company said today at Hong Kong’s web3 festival, an event that’s backed by the region’s government and has attracted crypto startups and institutions from all over Asia.
The online bank is set to facilitate crypto-fiat conversions in conjunction with two licensed exchanges in Hong Kong, HashKey and OSL, where customers can swap crypto into fiat currencies. In other words, the crypto-fiat conversion part is happening over the regulated exchanges rather than ZA Bank directly.
ZA Bank will likely be settling transactions for more crypto exchanges as more companies apply to obtain digital assets permits from the Hong Kong authorities.
In addition, ZA Bank, which was established by Chinese online insurer ZhongAn in 2017 as one of Hong Kong’s first virtual banks, has started to offer basic banking services to local web3 startups, a category of businesses widely underserved by traditional financial institutions.
It will be interesting to see if the handful of other online banks in Hong Kong will follow suit to compete for web3 clients and if ZA Bank’s offering will attract more crypto companies to set up shop in the Asian financial center.
The move is happening at a time when Hong Kong is trying to position itself as a crypto-friendly alternative to other hubs like the U.S. and Singapore and act as a sandbox for web3 businesses that originate from China, where crypto trading is illegal. The city has been revamping its digital assets regulatory framework, which tentatively plans to legalize retail trading of major cryptocurrencies like Bitcoin and Ether.
“As Hong Kong is stepping up efforts to cultivate a web3-friendly environment, ZA Bank’s online account opening for Web3 startups represents a major step forward in the integration of traditional banking services with the web3 world,” said Ronald Iu, CEO of ZA Bank.
“It signals a greater acceptance and recognition of the importance of this emerging sector and hopefully will encourage other financial institutions to follow suit in offering tailored banking services for web3 companies. We look forward to exploring collaborations with key global web3 businesses such as HashKey, OKX and more.”