Hong Kong’s ZA Bank is set to offer specialized banking services for stablecoin issuers, aiming to drive local web3 adoption. The virtual bank based in Hong Kong announced on April 5 its plan to provide security for fiat reserves that issuers can use to back digital assets. In addition to this, banking services such as fund transfers, payroll administration, and various deposit options will be available to stablecoin issuers.

Devon Sin, the alternate chief executive of ZA Bank, expressed the bank’s strong support for the web3 community, stating, “With these new services, we’re directly addressing the unique challenges faced by stablecoin issuers, ultimately promoting growth and stability within the web3 economy.”

Stablecoin issuers are required to hold a corresponding amount of fiat currency, such as dollars, in secure reserves to ensure the stability of their digital assets. However, managing these reserves securely has been a challenge for issuers, hindering widespread adoption within the web3 community.

ZA Bank has been actively involved in the web3 sector in Hong Kong, reporting over $1 billion in client transfer volume in 2023. Following the announcement by the Hong Kong Securities and Futures Commission (SFC) to accept license applications for retail virtual asset trading platforms (VATP) in May 2023, ZA Bank revealed its plans to offer retail virtual asset trading services in Hong Kong.

The Hong Kong government announced in December 2023 that stablecoin issuers will be required to obtain licenses. Issuers must ensure complete support of all circulating stablecoins with reserves equal to or greater than the par value to qualify for the license.

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