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 following the launch of new regulations for digital assets in June.
To establish itself as a crypto hub, Hong Kong implemented a new regulatory framework for cryptocurrency exchanges last year. This required all exchanges operating within the city to submit applications for licenses by February 2024. Competition is fierce, with 24 companies vying for these coveted licenses.
Approval from Hong Kong’s main financial watchdog, the Securities and Futures Commission (SFC), is highly sought after, given its reputation as a prestigious regulatory body.
Capitalizing on this interest, ZA Bank CEO Ronald Iu Man-chung he 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 only be announced once preparations are complete, he said.
ZA Bank did not respond to Cryptonews’ request for comment by press time.
Hong Kong cracks down on unlicensed virtual asset trading
The bank’s foray into the cryptocurrency sector comes amid a tougher regulatory environment in Hong Kong. In February, the city’s securities regulator, the SFC, issued a warning to cryptocurrency investors. He urged them to use only authorized platforms and to double check the registration status of their chosen exchanges.
This warning coincides with a critical deadline for Hong Kong-based cryptocurrency exchanges. They had until February 29 to submit license applications, or facial closure by May 31st. The SFC website reinforces this point with a clear message: Unlicensed exchanges must cease operations by the end of May.
Hong Kong revives crypto ambitions with ETFs and regulatory reform
The SFC 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 virtual asset trading licenses in Hong Kong. However, there are 24 candidates 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.
Even the regulator recently greenlit Asia’s first exchange-traded funds (ETFs) directly linked to Bitcoin and Ether. These ETFs began trading on the Hong Kong Stock Exchange on Tuesday.
Hong Kong’s cryptocurrency position has taken a hit in mid-2022 due to a lack of clear regulations and the rise of competing hubs such as Singapore and Dubai, known for their cryptocurrency-friendly stance. The city, however, 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 accelerates digital asset trading through its new licensing program. This program, along with the lifting of the cryptocurrency retail trading ban in 2023, signals Hong Kong’s renewed push to become a major cryptocurrency hub.
