Hong Kong’s ZA Bank wants to be the go-to bank for crypto startups

Image credit: ZA Bank CEO Ronald Iu / Photo: ZA Bank

As the collapses of Signature Bank and Silvergate sent crypto companies scrambling, a Hong Kong virtual bank is extending a warm welcome to web3 startups.

Hong Kong-based ZA Bank is now allowed to serve as a settlement bank for regulated web3 companies in the city, the company said today at Hong Kong’s web3 festival, an event supported by the region’s government that has attracted crypto startups and institutions from all over across 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 exchange crypto for fiat currencies. In other words, the crypto-fiat conversion part happens over the regulated exchanges instead of ZA Bank directly.

ZA Bank is likely to settle transactions for more crypto exchanges as more companies apply for digital asset permits from Hong Kong authorities.

In addition, ZA Bank, which was established by Chinese online insurance company ZhongAn in 2017 as one of Hong Kong’s first virtual banks, has begun offering basic banking services to local web3 startups, a category of businesses that is widely underserved by traditional financial institutions.

It will be interesting to see if a 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 comes at a time when Hong Kong is trying to position itself as a crypto-friendly alternative to other hubs like the US and Singapore and act as a sandbox for web3 companies coming from China, where crypto trading is illegal. The city has revamped its regulatory framework for digital assets, which for now plans to legalize the retail trade of major cryptocurrencies such as Bitcoin and Ether.

“As Hong Kong steps up its 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 greater acceptance and recognition of the importance of this emerging sector and will hopefully encourage other financial institutions to follow suit in offering tailored banking services for Web3 companies. We look forward to exploring partnerships with key global Web3 companies such as HashKey, OKX and more.”