ZA Bank, a digital neobank offering crypto trading, is reportedly considering physical branches in Hong Kong following new HKMA rules.
Hong Kong‘s digital banks are exploring the possibility of opening physical branches as the local regulator introduced new rules allowing them to do so, the South China Morning Post has learned.
According to the report, WeLab Bank, Mox Bank, and crypto-friendly ZA Bank, are among the banks considering setting up physical locations. The new Hong Kong Monetary Authority rule permits digital banks to operate a limited number of physical branches.
ZA Bank, the largest digital bank in the city, supported the introduction of physical branches, with a spokesperson for the bank told SCMP that face-to-face interactions would enhance the customer experience and help resolve complex issues more efficiently.
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The move comes after Hong Kong lawmaker Johnny Ng Kit-chong called for more support for crypto businesses in the city, especially as web3 startups struggle to access financial services.
Crypto startups in Hong Kong have faced difficulties opening bank accounts due to strict regulations and traditional banks’ cautious stance toward crypto. A report from the HKMA noted that out of over 120 web3 firms that were set up in Hong Kong in 2022, about 95% had trouble opening accounts with virtual banks.
Additionally, 70% of these firms were asked to have shareholders or directors visit Hong Kong multiple times, 60% had to maintain fixed deposits, and 54% took more than six months to open an account. Nearly 20% took between two and five months, while 3% were outright rejected.
Read more: Hong Kong legislator Johnny Ng advocates for Bitcoin, web3 development
