Key takeaways:
- Retail virtual asset trading will be available in the administrative region thanks to ZA Bank, a Hong Kong-based company.
- The bank will collaborate with regionally authorized virtual asset exchanges to gain regulatory clearance.
Retail virtual asset trading will be available in the administrative region thanks to ZA Bank, a Hong Kong-based company. The Hong Kong Securities and Futures Commission (SFC) had previously stated that it would begin accepting applications for retail virtual asset trading platform licenses on May 23, but the bank did not make its announcement until May 24, one day later.
In order to gain regulatory clearance, the bank will collaborate with regionally authorized virtual asset exchanges, according to a statement. Once these approvals are in place, bank clients will be able to trade virtual assets using fiat money via the ZA Bank App. Trading in virtual assets is a part of the bank’s more comprehensive strategy, which will eventually include trading in American stocks, the bank said.
According to its intentions, ZA Bank, the most prominent digital bank in Hong Kong and a subsidiary of Chinese internet insurer ZhongAn Online P&C Insurance, said:
“With this move, ZA Bank is set to support the Hong Kong SAR [Special Administrative Region] government’s vision to develop a vibrant sector and ecosystem for virtual assets.”
The introduction of the digital Hong Kong dollar pilot project by the Hong Kong Monetary Authority, in which ZA Bank is also taking part, and the growth of tech accelerators and incubators in that city are other signs of Hong Kong’s rise in the virtual asset field.
The SFC announced the start of the registration process and the execution of new rules for, among other things, the segregation of client assets, cybersecurity standards, and asset custody safety requirements. In June, those rules will become effective. Currently, the SFC does not regulate most public Hong Kong trading platforms for virtual assets.
One hundred fifty-two written responses were submitted during the consultation period in response to the announcement of the new licensing procedure, demonstrating the significant interest it received. Hong Kong has received an application for a virtual asset trading license from a division of the Chinese state-owned Greenland Corporation.
A plan to function as a settlement bank for token withdrawals from authorized exchanges in Hong Kong dollars, Chinese yuan, and US dollars was purportedly underway by ZA Bank in April.
