ZA Bank has become the first digital-only bank in Hong Kong to secure a license from the Securities and Futures Commission for Type 1 regulated activity. This significant milestone, reported on September 30, marks an important step in the bank’s journey to expand its services in the virtual asset space.

ZA Bank Receives Regulatory Approval

A spokesperson for ZA Bank confirmed that the bank has received approval from the China Securities Regulatory Commission. This approval allows the bank to incorporate new conditions for virtual asset transactions into its Type 1 license. This development comes after a year-long effort to comply with tightened restrictions on unlicensed exchanges and the advancement of a regulated crypto ecosystem in Hong Kong.

Future Plans and Investment Fund Services

ZA Bank aims to implement an investment fund service, operating under the crypto regulations set by Hong Kong’s financial regulators. Rockson Hsu, CEO of ZA Bank, emphasized the bank’s commitment to transforming the banking sector. “We look forward to further enhancing users’ experience with our game-changing investment fund services!” Hsu stated.

Regulatory Landscape in Hong Kong

In 2022, Hong Kong introduced new regulations requiring all crypto exchanges operating in the city to submit license applications by February 2024. Since then, over 24 companies have faced challenges in obtaining licenses. By August 2024, about 12 applications were withdrawn, including those from well-known exchanges such as Bybit, Huobi HK, and OKX.

In May 2024, the Securities and Futures Commission (SFC) advised investors to use only licensed platforms. The comprehensive cryptocurrency regulations came into effect in June 2023, setting a new standard for the industry in Hong Kong.

Stablecoin Initiatives and Partnerships

On July 18, 2024, ZA Bank began offering banking services to stablecoin issuers following the Hong Kong Monetary Authority’s (HKMA) approval of companies for its stablecoin sandbox initiative. In a press release, ZA Bank announced its partnership with RD InnoTech, one of the first companies listed by the HKMA for sandbox trials. ZA Bank successfully onboarded around ten additional stablecoin clients during this period.

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