This recently created regulatory framework requires institutions issuing stablecoins in cryptocurrencies to deposit their reserve assets with local banks. This is an important step towards ensuring greater stability and security in the digital asset market.

According to local media, ZA Bank confirmed in a statement published today that it has taken on the role of being the first digital bank to offer such services in Hong Kong. This development is considered a critical step at the intersection of traditional banking and financial technology innovation.

As stablecoins become an integral part of the global financial system, the provision of sound reserve banking services by established financial institutions such as ZA Bank is of great importance to guarantee their stability and reliability.

According to the latest list of participants announced by the Hong Kong Monetary Authority (HKMA), Yuancoin is among the first members to participate in collaboration with ZA Bank.

Yuancoin is entering into an important partnership with ZA Bank as the first stablecoin issuance institution to benefit from these reserve banking services. This partnership is considered a meaningful step to promote innovation and increase the stability of digital assets.

ZA Bank CEO Yao Wensong emphasized that providing banking services to stablecoin issuance institutions combines traditional banking with fintech innovations. He also noted that their partnership with Yuancoin demonstrates their shared commitment to fostering innovation and increasing the stability of digital assets.

The bank stated that it is in talks with approximately 10 other stablecoin companies, pointing to potential future projects and partnerships. The bank stated that it supports HKMA’s policies and has a positive approach to developments that have entered the sandbox phase.

ZA Bank is taking initiatives to step into Hong Kong’s booming Web3 market. The bank facilitated over $1 billion in transactions for Web3 customers in 2023 alone.

In May 2023, just a day after the Hong Kong Securities and Futures Commission (SFC) announced that it would begin accepting license applications for retail virtual asset trading platforms (VATP), the bank announced plans to launch retail virtual asset trading services in the territory.

Following its entry into the retail virtual asset trading market, the bank has captured more than 80% of the customer banking market share for VATPs in Hong Kong.

The Hong Kong Securities and Futures Commission added seven unlicensed cryptocurrency trading platforms to its alert list on July 15, citing concerns about investors’ safety and unauthorized operation of these platforms.