The Bank of Hong Kong accepts stable coin issuers

In a move to accelerate domestic Web3 adoption, Hong Kong's Zaa Bank has announced a dedicated banking service for stablecoin issuers.

According to an announcement on April 5, the Hong Kong-based virtual bank will open security for fiat reserves, which issuers can use to support digital assets.

Stablecoin issuers have access to banking services such as fund transfer, payroll management and various deposit options.

That bank's interim CEO, Devon Sean, said the institution has “unwavering support” for the Web3 community:

“With these new services, we are directly addressing the unique challenges that stablecoin issuers face, ultimately encouraging growth and stability in the Web3 economy.”

In general, for stablecoins to maintain their value, the issuer must safely store an equivalent amount of fiat currency, such as dollars, in fiat reserves. This ensures that holders can always redeem the equivalent amount of their stable fiat currency.

Related: Japan's Sony Bank Tests Yen-Backed Stablecoin for Game and Sports IP Payments

However, managing these reserves securely has been a challenge for Stablecoin issuers, preventing widespread adoption and generating significant interest in the larger Web3 community.

ZA Bank has been actively trying to involve itself in the growing Web 3 scene in Hong Kong. In the year By 2023, the transfer rate from customers in the Web3 space is reported to exceed $1 billion.

In May 2023, it announced that it will begin offering retail virtual asset trading in the jurisdiction, a day after Hong Kong's Securities and Futures Commission (SFC) said it would begin accepting license applications for its retail virtual asset trading platform (VATP).

The bank has since then reportedly acquired more than 80% of VaTP's client banking needs in Hong Kong.

He said he has onboarded more than 100 Web3 companies in an effort to drive local adoption.

In the year The Hong Kong government will require licensing of stablecoin providers by December 2023, according to a consultation paper from the Office of the Financial Services and Treasury and the Hong Kong Monetary Authority.

The criteria for obtaining such permission requires full support of all fixed coin currencies that are “at least equal to the fair value”.

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