In a significant move for the digital finance sector, ZA Bank, a Hong Kong-based virtual bank, has announced it will allow retail users to buy and sell cryptocurrencies—specifically Bitcoin and Ethereum—directly using fiat currency. This makes it the first bank in Asia to offer such a service to retail customers, bridging the gap between traditional banking and the growing crypto market.
Simplifying Crypto Access for Retail Users
ZA Bank’s new service lowers the barrier to entry for cryptocurrency trading. Users can start investing with as little as US$70 or HK$600. Each transaction incurs a commission of US$1.99 or HK$15, along with a platform fee of 1.5% of the traded amount. However, the bank is running a promotional offer until the end of June 2025, waiving the commission and reducing the platform fee to just 0.8%.
According to Rutherford Wu, Acting Chief Executive Officer of ZA Bank, the service is available to all Hong Kong residents. Applicants must provide a valid Hong Kong ID, proof of address, and a local phone number. They are also required to complete a risk assessment. To protect users from overexposure, the bank limits cryptocurrency holdings to a maximum of 20% of the customer’s total investment portfolio.
This initiative is the result of a partnership between ZA Bank and HashKey, a licensed cryptocurrency exchange in Hong Kong. A ZA Bank representative stated that the collaboration is designed to comply with regulatory standards while making crypto trading more accessible. A HashKey spokesperson added that the partnership supports the development of the Web3 ecosystem and expands financial service options for users.
A recent survey by the Hong Kong Bankers Association supports this direction: nearly 70% of respondents indicated that they would find virtual asset trading more convenient if offered through their bank, suggesting strong public interest in integrated services.
Digital Banks Explore New Opportunities
ZA Bank received its virtual banking license from the Hong Kong Monetary Authority (HKMA) in 2019—a category renamed “digital bank” in October 2024. Earlier, in April 2024, the bank announced plans to offer banking services to stablecoin issuers, responding to the territory’s growing interest in Web3 technologies.
These services include providing custody for fiat reserves, which issuers can use to back their digital assets. Stablecoin projects can also access standard banking offerings such as fund transfers, payroll management, and multiple deposit options.
On July 18, 2024, the HKMA released its first list of participants for the “Stablecoin Issuer Sandbox.” Among the three initial participants were JD CoinChain Technology (Hong Kong), RBIT Innovation Technology, and a consortium comprising Standard Chartered Bank (Hong Kong), Animoca Brands, and HKT.
The HKMA defines a stablecoin as a type of virtual asset designed to maintain a stable value, typically pegged to a fiat currency.
In a related development, Airstar Bank—another licensed virtual bank in Hong Kong—has partnered with JD CoinChain within the HKMA’s sandbox framework. Airstar will support JD CoinChain in piloting a new cross-border payment solution based on stablecoin technology.
Airstar Bank, also one of Hong Kong’s first virtual banks, is majority-owned by Xiaomi Group. This collaboration brings together JD.com, founded by Liu Qiangdong, and Xiaomi, founded by Lei Jun, highlighting major tech players’ growing involvement in Hong Kong’s digital currency landscape.
Futu Securities, the second-largest shareholder of Airstar Bank, has also begun offering Bitcoin and Ethereum trading services, becoming the first online brokerage in Hong Kong to provide crypto trading directly to retail investors.
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Connecting Traditional and Crypto Banking Systems
Since the release of its policy statement on virtual asset development in 2022, Hong Kong has introduced a series of regulations to foster a compliant crypto market. In August 2023, authorities began permitting licensed exchanges to offer services to retail investors.
Currently, three exchanges have received licenses from the Securities and Futures Commission (SFC): OSL and HashKey were licensed in 2020 and 2022, respectively, and Hong Kong Virtual Asset Exchange (HKVAX) received approval in October 2024. The SFC has indicated that more licenses may be granted to crypto exchanges and digital asset firms by the end of the year.
In its partnership with ZA Bank, HashKey provides custody, trading, and settlement support for user assets. Media reports quote HashKey Exchange Chief Analyst Ding Zhaofei as saying that the exchange is in similar talks with other leading banks, brokerages, and funds.
In a speech earlier this year, Dr. Xiao Feng, Chairman of HashKey Group, reflected on the evolution of blockchain-based finance. He described the emergence of a new financial market system—the Crypto Financial Market—which operates alongside the traditional system. While traditional finance relies on centralized accounting in fiat currency, the crypto system uses distributed ledgers and cryptocurrency as the unit of account.
Dr. Xiao predicted that these two systems will develop in parallel and achieve interoperability by 2025. He outlined several pathways for convergence:
- Stablecoins: Often referred to as “PayFi,” stablecoins enable fiat currency to be tokenized and used within crypto networks. Annual trading volume for stablecoins is projected to reach US$6 trillion in 2024.
- Crypto ETFs: Exchange-traded funds allow traditional investors to gain exposure to crypto assets without managing private keys. The total holdings of U.S. spot Bitcoin ETFs, for example, are nearing US$70 billion.
- Real World Assets (RWA): This involves tokenizing traditional assets such as real estate or debt instruments on a blockchain.
- Security Token Offerings (STO): STOs could offer companies a new way to raise capital and list shares through tokenization, potentially serving as an alternative to traditional IPOs.
According to Dr. Xiao, all these channels require the involvement of licensed and regulated financial institutions, which will serve as critical bridges between traditional and crypto financial systems.
Frequently Asked Questions
What cryptocurrencies can I trade through ZA Bank?
Currently, ZA Bank supports trading for Bitcoin (BTC) and Ethereum (ETH) only. The bank may consider adding more cryptocurrencies in the future based on regulatory approval and market demand.
Is my cryptocurrency held directly with the bank?
No, ZA Bank has partnered with HashKey Exchange, which provides custody services for the digital assets. The bank acts as the fiat on- and off-ramp, while HashKey manages the crypto trading and storage.
Are there any limits on how much cryptocurrency I can buy?
Yes, to promote responsible investing, ZA Bank limits a user’s total cryptocurrency holdings to no more than 20% of their overall investment portfolio. Additional limits may apply based on risk assessment results.
What documents are required to open a crypto trading account?
You need a valid Hong Kong ID card, proof of residential address, and a local mobile number. You will also need to complete a risk profiling questionnaire.
How does ZA Bank ensure compliance and security?
The service operates under the regulatory oversight of the HKMA and SFC. All transactions are monitored, and user assets are held with a licensed partner. The bank uses identity verification and risk assessments to protect users.
Can I transfer my crypto to an external wallet?
Currently, the service is designed for buying, holding, and selling cryptocurrencies within the platform. Support for transfers to external wallets may be introduced in later phases.