Founded by Chinese billionaire Ou Yaping among others, ZA Bank will offer token-to-fiat currency conversions over licensed exchanges, Ronald Iu, the lender’s chief executive officer, said in an interview Tuesday. ZA will act as a settlement bank for clients to allow withdrawals in Hong Kong, China and US currencies after they deposit crypto tokens with exchanges, Iu said.

The business model is already in operation with HashKey and OSL, the only two currently licensed crypto exchanges in Hong Kong, Iu said. ZA Bank will also provide the same service for other exchanges as they become licensed.

“For the dozen of interested firms, big or small, from abroad and local, top of their concern is to have a path to make things work,” said Iu.

Hong Kong is going against the current in opening up to the beleaguered sector as it seeks to revive its status as a financial center following years of Covid restrictions and political upheaval. But access to banking have been a major hurdle for the city’s ambitions. The city’s banking and securities regulators will host a roundtable for crypto players and bankers to share experiences and perspectives on banking services later this month.

Hong Kong is planning to roll out a revamped virtual asset exchanges framework as of June 1 that allows exchange operators to open to retail investors.

The recent collapse of Silicon Valley Bank has further eroded banking access for many crypto firms as traditional banks have been reluctant to provide services because of strict know-your-customer and anti-money laundering rules.

ZA Bank is offering online accounts opening for local Web3 startups and small-medium enterprises, following a trial in a regulatory sandbox that on-boarded some 100 firms. The bank linked up to the city’s company registry data, allowing for minimal information input and cross-checking, according to Devon Sin, alternate chief executive of ZA Bank.

ZA Bank currently only plans to engage licensed exchanges and conducts AML scrutiny against the usual checklists to satisfy the regulatory requirements. No AML issues have popped up over the recent months of work, Sin said.

The lender doesn’t offer services for clients from mainland China given the restrictions in place there, according to Iu.

Launched officially in March 2020, ZA Bank is one of Hong Kong’s eight licensed virtual banks and had amassed the most in terms of net assets while remaining unprofitable as of last year.

“It’s too early to say what the revenue model is here,” said Iu. “More clients, more deposit, more business opportunity is always great for the bank.”

The virtual lender doesn’t expect it will need to boost its headcount to handle the the crypto client push, Iu said.