Hong Kong’s virtual lender ZA Bank is embracing
digital finance by engaging with potential stablecoin issuers to establish fiat
reserve accounts. This initiative marks a significant step towards integrating digital assets into traditional banking in Hong Kong as the country explores listing digital-asset
exchange-traded funds (ETFs) to enhance its presence in the sector.
According to a report by Bloomberg, ZA Bank’s
Alternate Chief Executive, Devon Sin, revealed in a recent interview about the
bank’s initiative to engage with existing and prospective stablecoin
issuers. Sin emphasized the versatility of stablecoins,
highlighting their potential applications in wholesale and retail markets,
tokenization
Tokenization
Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen
Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen
Read this Term, exchange trading settlements, and cross-border remittances.
He expressed ZA Bank’s interest in exploring tangible
use cases for stablecoins in collaboration with potential issuers once admitted
to the Hong Kong Monetary Authority’s regulatory sandbox. Hong Kong aims to position itself as a digital asset
hub. The city has taken significant strides in regulating the crypto sector,
licensing its first crypto trading platforms, and exploring the listing of
ETFs.
Hong Kong’s ZA Bank is talking to potential stablecoin issuers about setting up accounts for the cash reserves that would back the tokens https://t.co/FDWyd3kr5s
— Bloomberg (@business) April 4, 2024
Additionally, the Hong Kong Monetary Authority is in
the process of formulating a regulatory framework for stablecoins, which
typically maintain a 1-1 peg to fiat currency and are backed by
cash and bond reserves. ZA Bank has reportedly facilitated over $1 billion in
transfers from more than 100 Web 3 clients.
Hong Kong Regulates Stablecoin Issuers
Last year, Hong Kong adopted the regulation of
stablecoin
Stablecoin
Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including
Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including
Read this Term issuers. The proposed rules, outlined in a consultation paper by the
Financial Services and the Treasury Bureau, and the Hong Kong Monetary
Authority, marked a significant move towards ensuring stability and security
within the digital asset ecosystem, Finance Magnates reported.
The consultation paper defined stablecoins as digital
assets pegged to one or more fiat currencies, aiming to maintain a stable
value. Under the proposed rules, stablecoin issuers actively marketing
their fiat-referenced stablecoins to the Hong Kong public must obtain a local
license.
Notably, algorithmic stablecoins are not permitted in the region, a decision influenced by the collapse of TerraUSD, an algorithmic
stablecoin. To obtain a license, stablecoin issuers must adhere to
stringent requirements.
They must maintain a full reserve of assets backing
the stablecoins, ensuring it is at least equal to the par value. These reserves
must be segregated and securely stored, and they must be regularly reported to regulators. Additionally, stablecoin issuers must establish a local presence by appointing key personnel, including a Chief Executive Officer and senior management team.
Hong Kong’s virtual lender ZA Bank is embracing
digital finance by engaging with potential stablecoin issuers to establish fiat
reserve accounts. This initiative marks a significant step towards integrating digital assets into traditional banking in Hong Kong as the country explores listing digital-asset
exchange-traded funds (ETFs) to enhance its presence in the sector.
According to a report by Bloomberg, ZA Bank’s
Alternate Chief Executive, Devon Sin, revealed in a recent interview about the
bank’s initiative to engage with existing and prospective stablecoin
issuers. Sin emphasized the versatility of stablecoins,
highlighting their potential applications in wholesale and retail markets,
tokenization
Tokenization
Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen
Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen
Read this Term, exchange trading settlements, and cross-border remittances.
He expressed ZA Bank’s interest in exploring tangible
use cases for stablecoins in collaboration with potential issuers once admitted
to the Hong Kong Monetary Authority’s regulatory sandbox. Hong Kong aims to position itself as a digital asset
hub. The city has taken significant strides in regulating the crypto sector,
licensing its first crypto trading platforms, and exploring the listing of
ETFs.
Hong Kong’s ZA Bank is talking to potential stablecoin issuers about setting up accounts for the cash reserves that would back the tokens https://t.co/FDWyd3kr5s
— Bloomberg (@business) April 4, 2024
Additionally, the Hong Kong Monetary Authority is in
the process of formulating a regulatory framework for stablecoins, which
typically maintain a 1-1 peg to fiat currency and are backed by
cash and bond reserves. ZA Bank has reportedly facilitated over $1 billion in
transfers from more than 100 Web 3 clients.
Hong Kong Regulates Stablecoin Issuers
Last year, Hong Kong adopted the regulation of
stablecoin
Stablecoin
Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including
Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including
Read this Term issuers. The proposed rules, outlined in a consultation paper by the
Financial Services and the Treasury Bureau, and the Hong Kong Monetary
Authority, marked a significant move towards ensuring stability and security
within the digital asset ecosystem, Finance Magnates reported.
The consultation paper defined stablecoins as digital
assets pegged to one or more fiat currencies, aiming to maintain a stable
value. Under the proposed rules, stablecoin issuers actively marketing
their fiat-referenced stablecoins to the Hong Kong public must obtain a local
license.
Notably, algorithmic stablecoins are not permitted in the region, a decision influenced by the collapse of TerraUSD, an algorithmic
stablecoin. To obtain a license, stablecoin issuers must adhere to
stringent requirements.
They must maintain a full reserve of assets backing
the stablecoins, ensuring it is at least equal to the par value. These reserves
must be segregated and securely stored, and they must be regularly reported to regulators. Additionally, stablecoin issuers must establish a local presence by appointing key personnel, including a Chief Executive Officer and senior management team.