Hong Kong-based ZA Bank has announced plans to provide professional banking services to stablecoin issuers, a strategy it expects will boost local adoption of web3 technology.
The Hong Kong-based virtual bank confirmed on April 5 that it will open a safe haven for fiat currency reserves that issuers can use to back digital assets.
In addition, stablecoin issuers will also enjoy banking services including fund transfers, payroll management and multiple deposit options.
Devon Sin, the incoming CEO of ZA Bank, stated that the bank has “unwavering support” for the web3 community:
Sin said, “Through these new services, we can directly address the unique challenges faced by stablecoin issuers, ultimately promoting the growth and stability of the web3 economy.”
To ensure that stablecoins maintain their value, issuers must hold a corresponding amount of fiat currency (such as US dollars) in a security reserve. This guarantees that stablecoin holders can redeem their digital assets with an equivalent amount of underlying fiat currency.
Despite this, stablecoin issuers have had difficulty managing these reserves securely. This situation has hindered the widespread adoption of stablecoins and left an important gap in the overall web3 community.
ZA Bank has made active efforts to participate in Hong Kong’s rapidly expanding web3 scene, reporting that its customer transfer volume in the web3 space exceeded $1 billion in 2023.
Following the Hong Kong Securities and Futures Commission’s (SFC) announcement in May 2023 that it would accept applications for a retail virtual asset trading platform (VATP) license, ZA Bank has revealed its plans to provide retail virtual asset trading services in Hong Kong.
Since then, the bank has reportedly met more than 80% of VATP customer banking requirements in Hong Kong. In addition, it said it has onboarded more than 100 web3 companies as part of its push for local adoption.
According to a consultation document announced by the Hong Kong government in December 2023, stablecoin issuers will be required to obtain a license. The document was jointly issued by the Financial Services and the Treasury Bureau and the Hong Kong Monetary Authority.
To obtain such a license, issuers must guarantee that all stablecoins in circulation are fully backed by reserves “at least equal to par value.” #ZABank #香港稳定币
