Hong Kong Banks Support Crypto, More Funds to Move into Stablecoin: CZ

  • The largest virtual bank in Hong Kong is expanding its services to include crypto transfers.
  • Previously, the HK government allocated $50 million to expedite Web3 development.

A recent tweet by the CEO of Binance, Changpeng Zhao (CZ), suggests that Hong Kong (HK) banks are beginning to support cryptocurrencies. Zhao stressed the significance of the HK banks’ move, saying more funds will flow into the crypto market, particularly in favor of stablecoins like Tether (USDT).

However, some crypto enthusiasts are paranoid about the recent shift towards crypto-friendliness in Hong Kong. They believe it could be a trap set by the Chinese government to attract crypto businesses, only to later crack down on them with full force.

Nonetheless, an HK-based media house reported on Tuesday that ZA Bank, the largest virtual bank in Hong Kong, is expanding its services to include transfers of crypto and fiat currencies and account services for the digital asset sector.

According to CEO Ronald Iu, ZA will offer token-to-fiat conversions over licensed exchanges while acting as a settlement partner for clients to allow withdrawals in Hong Kong, China, and US currencies. ZA bank already offers this service to HashKey and OSL, the only two currently licensed crypto exchanges in Hong Kong.

In February, Hong Kong’s Securities and Futures Commission (SFC) initiated a consultation process for Virtual Asset Service Providers (VASPs) seeking a license to provide trading services. The regulator collected input on whether licensed platforms should serve retail investors and under what investor protection measures.

In the same month, the Hong Kong government expressed a strong interest in Web3, aiming to seize the opportunity to spearhead innovation and development. The government earmarked $50 million in its 2023/2024 fiscal year budget to expedite Web3 ecosystem development.

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