Key takeaways:
- The largest virtual bank in Hong Kong based on assets, ZA Bank, plans to support crypto-to-fiat swaps and offer services for cryptocurrency accounts.
- The account services are offered when American businesses are having trouble finding local banking partners and regularly going outside the country.
According to reports, the largest virtual bank in Hong Kong based on assets, ZA Bank, plans to support crypto-to-fiat swaps and offer services for cryptocurrency accounts.
Bloomberg reported on April 12 that the bank also provides account services to cryptocurrency companies and will serve as a settlement bank to enable token deposits at authorized exchanges to be withdrawn in Hong Kong dollars, Chinese yuan, and US dollars.
The service would not be made available to clients from the mainland of China, according to ZA Bank CEO Ronald Iu, due to local laws. The accounts for local crypto enterprises come after a trial in a regulatory sandbox in which about 100 firms participated.
Ronald said HashKey and OSL, Hong Kong’s only two authorized cryptocurrency exchanges, presently provide currency conversion services. After they receive their licenses, he said, ZA Bank would offer the same service at other exchanges.
The collapse of crypto-friendly banks Silicon Valley Bank, Silvergate Bank, and Signature Bank has left crypto companies in the US scrambling to find banking partners. Ronald added that the Hong Kong-based ZA Bank appeared to be offering the companies a possible answer:
“For the dozens of interested firms, big or small, from abroad and local, top of their concern is to have a path to make things work.”
The announcement from ZA Bank reportedly occurs on the same day that Hong Kong officials are reportedly making a variety of aggressive steps to establish the region as a hub for cryptocurrencies. Many in the community of cryptocurrency enthusiasts feel Hong Kong’s approach—in contrast to the animosity from US regulators—will aid it in its endeavors.
According to reports, Chinese state-owned banks have also taken an interest in the crypto enterprises relocating to the area and are either providing banking services to them or contacting them.
The tax department of the Chinese government issued Bitmain a fine of $3 million a few days ago, according to reports. According to local media reports, Bitmain received a notice about the tax breach in August 2022. But it claims that Bitmain owes 16.6 million yuan ($2.4 million) in unpaid personal income tax.
