Hong Kong’s ZA Bank, a unit of China’s ZhongAn Online P&C Insurance, is reportedly looking into providing virtual asset-related services in light of new regulations for digital assets set to launch in June. As part of efforts to establish itself as a crypto hub, Hong Kong implemented a new regulatory framework for crypto exchanges last year. The city required all exchanges operating within its borders to submit license applications by February 2024. There is intense competition, with 24 companies competing for these licenses. Approval from Hong Kong’s top financial watchdog, the Securities and Futures Commission (SFC), is highly coveted due to its reputation as a prestigious regulatory body.
In a recent interview with SCMP, ZA Bank CEO Ronald Iu Man-chung stated that the bank is actively preparing to launch virtual asset trading services for retail investors. However, specific details will be revealed only after the bank finalizes its preparations. Hong Kong has been cracking down on unlicensed virtual asset exchanges, with the SFC issuing warnings to investors urging them to use only licensed platforms and check the registration status of their chosen exchanges. Hong Kong-based crypto exchanges had until February 29 to submit license applications, or they will face closure by the end of May.
The SFC has advised investors to move their digital assets to platforms that are regulated or in the process of obtaining a license. Currently, only OSL Digital Securities and Hash Blockchain hold licenses for virtual asset trading in Hong Kong. There are 24 applicants vying for approval, including well-known names like OKX, HKVAX, Bybit, and DFX Labs. The SFC will publish a list of approved and rejected applications for virtual asset trading platforms on a public registry by June 1, 2024. The regulator has also approved Asia’s first exchange-traded funds (ETFs) directly tied to Bitcoin and Ether, which started trading on the Hong Kong Stock Exchange recently.
Hong Kong’s crypto ambitions received a boost with the lifting of the retail crypto trading ban in 2023 and the introduction of regulatory reforms. ZA Bank’s Ronald Iu emphasized the bank’s commitment to supporting the digital asset sector, including Web3 startups, as Hong Kong gears up for digital asset trading through its licensing program. The city’s crypto standing had suffered in mid-2022 due to unclear regulations and the emergence of competitor hubs like Singapore and Dubai, which are known for their crypto-friendly approach. However, Hong Kong is making a comeback as it aims to become a significant crypto hub by revamping its regulatory framework and attracting digital asset investors and businesses.