Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
ZA Bank, the largest digital financial institution in Hong Kong and a pioneer in crypto-friendly financial services, is reportedly considering the establishment of physical branches.
According to a report by the South China Morning Post, the Hong Kong Monetary Authority (HKMA) has granted permission for digital banks to operate limited physical locations.
ZA Bank Can Now Establish A Physical Branch: What Does This Mean For Hong Kong Crypto Users?
This recent decision by the HKMA now allows digital banks to set up physical branches.
Since issuing eight digital bank licenses in 2019, the authority has been enhancing the digital asset sector.
The HKMA indicated that this change is motivated by industry feedback aimed at improving transaction processes and customer experience.
A spokesperson mentioned in the SCMP report,
“Providing flexibility to digital banks to conduct business through non-electronic channels in a limited manner will help enhance their transaction processes and improve customer experience.”
However, the HKMA stressed that it would carefully assess applications to ensure that any physical branches align with the banks’ stated objectives and effectively meet customer needs.
Several digital banks have shown interest in this opportunity, with ZA Bank, Mox Bank, and WeLab Bank among those contemplating the move.
Mox Bank CEO Barbaros Uygun emphasized the advantages of this transition, noting that a physical presence would:
“enhance the competitiveness of digital banks and customer trust, promote greater financial inclusion, and accelerate the growth of the industry.”
Similarly, WeLab Bank CEO Tat Lee expressed a positive stance towards offline channels, even advocating:
“It is essential that the offline channels utilize various methods to engage with the public and raise awareness of the digital banking services.”
ZA Bank, the first digital bank to report a profit, welcomed the regulatory change.
Related Posts
The bank views physical branches as a means to address complex customer issues more effectively and improve overall satisfaction.
A spokesperson stated,
“Face-to-face interactions can significantly enhance the resolution process, further improving the overall customer experience.”
Hong Kong’s Growing Crypto Sector
As one of the few crypto-friendly financial institutions in the city, ZA Bank’s potential expansion into physical locations could provide essential support for the local web3 and blockchain sectors.
Hong Kong’s crypto startups have long faced challenges in obtaining financial services.
Many of these companies have been subjected to stringent requirements, such as multiple in-person shareholder visits, mandatory fixed deposits, and lengthy processing times.
ZA Bank’s initiative to establish physical branches may alleviate some of these difficulties by offering a more accessible and transparent onboarding process for crypto startups.
This development also aligns with broader trends in Hong Kong’s crypto sector.
The HKMA has recently introduced the “Supervisory Incubator for Distributed Ledger Technology” (DLT) to assist banks in safely adopting blockchain-based solutions.
The HKMA has unveiled the “Supervisory Incubator for Distributed Ledger Technology” to help banks adopt blockchain-based solutions.#HongKong #Blockchainhttps://t.co/yctuQMvpRg
— Cryptonews.com (@cryptonews) January 9, 2025
This program includes two main components: direct support for banks through advisory teams to test risk management strategies, initially focusing on tokenized deposits, and industry-wide collaboration to share best practices and streamline DLT integration.
At the same time, Hong Kong legislator Wu Jiexhuang has proposed incorporating Bitcoin into the city’s national reserves under the “one country, two systems” framework to enhance financial stability.
He suggests utilizing Bitcoin exchange-traded funds (ETFs) as a gateway, referencing global trends such as the adoption of Bitcoin by El Salvador and Bhutan and the support of U.S. President-elect Donald Trump for classifying Bitcoin as a strategic reserve asset.
Moreover, Hong Kong has committed to implementing the OECD’s Crypto-Asset Reporting Framework (CARF) to improve international tax transparency and combat cross-border tax evasion.
The post Crypto-friendly ZA Bank Considers Physical Branches in Hong Kong appeared first on Cryptonews.
