Hong Kong’s virtual bank ZA Bank announced Friday the introduction of a reserve bank service for stablecoin issuers. The bank noted that it is negotiating partnerships with nearly 10 stablecoin companies.
According to a local report, stablecoin issuer Yuancoin became one of the first members to participate in the latest list of participants announced by the Hong Kong Monetary Authority (HKMA).
According to Yao Wensong, CEO of ZA Bank, the service combines the traditional banking sector with innovations in financial technology.
“The company’s partnership with Yuancoin symbolizes a shared commitment to promoting innovation and enhancing the stability of digital assets.” The move marks ZA Bank as the first virtual banking pioneer to offer innovative banking services to stablecoin issuers.
By providing a safe and reliable banking infrastructure to ensure greater security for users, the virtual bank aims to build confidence in the stablecoin market.
Moreover, the latest regulatory framework issued by the HKMA requires stablecoin issuers to deposit reserve assets in local banks. The implementation of ZA Bank is in line with the regulator’s initiative.
The announcement comes at a time when the popularity of stablecoin coins is growing among Hong Kong citizens who use them for daily transactions. In addition, there has been a surge in the number of stablecoin issuers operating in the country.
ZA Bank offers cryptocurrency conversion on licensed exchanges
In April 2023, a Hong Kong-based virtual bank announced the facilitation of exchange services between cryptocurrency and legal tender through licensed exchanges.
ZA Bank will act as a clearing bank for customers to enable withdrawals in Hong Kong, Chinese and U.S. currencies after crypto tokens are deposited on exchanges, the bank noted at the time.
ZA Bank, officially launched in March 2020, is one of eight licensed virtual banks in Hong Kong .
