ZA Bank, a unit of China’s ZhongAn Online P&C Insurance, is looking to offer virtual asset-related services following the launch of new regulations for digital assets in June. Hong Kong has implemented a new regulatory framework for crypto exchanges in an effort to establish itself as a crypto hub. All exchanges operating within the city were required to submit license applications by Feb. 2024, with 24 companies competing for these licenses. Approval from the Securities and Futures Commission (SFC) is highly sought-after due to its prestigious reputation.
In a recent interview with the South China Morning Post, ZA Bank CEO Ronald Iu Man-chung stated that the bank is actively preparing to launch virtual asset trading services for retail investors. However, specific details will only be announced once preparations are finalized. The bank’s move comes within a stricter regulatory landscape in Hong Kong, with the SFC issuing warnings to crypto investors to only use licensed platforms and to check the registration status of their chosen exchanges. Hong Kong-based crypto exchanges had until Feb. 29 to submit license applications or face closure by May 31.
The SFC has advised investors to transfer their digital assets to platforms that are already regulated or in the process of obtaining a license. Currently, only OSL Digital Securities and Hash Blockchain hold licenses for virtual asset trading in Hong Kong. The regulator will reveal a list of approved and rejected applications for virtual asset trading platforms on a public registry by June 1, 2024. Additionally, Asia’s first exchange-traded funds (ETFs) tied to Bitcoin and Ether began trading on the Hong Kong Stock Exchange recently.
Hong Kong’s crypto ambitions suffered a setback in mid-2022 due to a lack of clear regulations and the emergence of competitor hubs like Singapore and Dubai. However, the city is making a comeback, with renewed efforts to position itself as a major crypto hub. ZA Bank’s Ronald Iu highlights the bank’s commitment to supporting the digital asset sector, including Web3 startups, as Hong Kong increases digital asset trading through its new licensing program. The lifting of the retail crypto trading ban in 2023 further signals Hong Kong’s push to become a prominent player in the crypto space.
Overall, Hong Kong’s new regulatory framework for virtual asset trading and the SFC’s heightened scrutiny of unlicensed exchanges reflect the city’s determination to enhance its standing in the crypto industry. With ZA Bank’s plans to offer virtual asset-related services for retail investors, along with the approval of ETFs tied to Bitcoin and Ether, Hong Kong is taking significant steps to solidify its position as a key player in the crypto market. Despite facing challenges in the past, Hong Kong’s renewed focus on digital assets and crypto-friendly initiatives signal a promising future for the city as a prominent crypto hub in the region.
