ZA Bank to Boost Web3 Adoption with Specialized Services for Stablecoin Issuers in Hong Kong
Summary:
Hong Kong-based ZA Bank announces plans to offer dedicated banking services for stablecoin issuers to bolster Web3 adoption locally. The virtual bank will facilitate security for fiat reserves and give issuers access to various banking services. Over 80% of client banking needs of the Virtual Asset Trading Platform (VATP) in Hong Kong have been secured by the bank, which has also onboarded over 100 Web3 firms. The Hong Kong government will require stablecoin issuers to obtain licenses that ensure full backing of circulating stablecoins with reserves.
In an initiative to accelerate the use of Web3 locally, ZA Bank of Hong Kong revealed plans to provide specialized banking facilities for stablecoin creators. As per the announcement made on 5th of April, this virtual bank, based out of Hong Kong, intends to fortify fiat reserves security that will be used to support digital entities. Issuers of stablecoins will be facilitated with banking amenities such as an array of deposit options, fund transfers, and payroll management. Devon Sin, Deputy CEO of ZA Bank, conveyed the institution's resolute support to the Web3 community, adding that these new offerings will target the specific obstacles that stablecoin issuers face, thereby fostering the growth and equilibrium of the Web3 economy.
Typically, to retain the value of stablecoins, the creators are required to safely store an amount equivalent to the fiat currency like dollars, in fiat reserves. Consequently, holders can always exchange their stablecoin holdings for an equal amount of the base fiat currency. However, the secure management of these reserves has posed a challenge to stablecoin issuers, hampering broader adoption and generating a major requirement in the wider Web3 community.
ZA Bank has been proactive in engaging with Hong Kong's thriving Web3 sphere. It recorded client transfer volumes exceeding $1 billion within the Web3 realm in 2023. In May the same year, it declared plans to initiate retail virtual asset trading in the special administrative region, immediately following the announcement made by the Hong Kong Securities and Futures Commission (SFC) about their inclination to accept license applications for retail virtual asset trading platforms.
The bank has since then indicated that it has accommodated beyond 80% of the customer banking necessities of the Virtual Asset Trading Platform (VATP) in Hong Kong. It has also claimed to have onboarded over 100 Web3 firms in its pursuit of prompting local adoption. In the last month, the Hong Kong government announced that they would mandate licensing for stablecoin issuers as per a consultation paper from the Financial Services and Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA). The licensing will require full backing of all circulating stablecoins with reserves that should be "at least equal to the par value.
Published At
4/5/2024 4:15:22 PM
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