The Hong Kong Monetary Authority has approved the issue of a banking license for a virtual bank to Tencent.

Hong Kong has been quick off the mark to give digital banks the go-ahead. The HKMA has approved licenses so far to eight out of 29 applicants who applied by September 2018. Tencent is the first to propose a blockchain bank.

Tencent’s blockchain bank to ramp up quickly

Tencent blockchain chief Yige Cai confirmed at the World Blockchain Summit that the regulator had approved the company’s virtual banking license. He further clarified that Tencent will now assemble a team to take the blockchain-based project forward.

“Hong Kong’s new regulations and supervision on digital assets transactions validate the importance of blockchain technology and digital assets, which is good news for the whole industry,” Cai said.

Over 200 entities on the path to adopting blockchain technology

A comprehensive list of over 200 banks and financial institutions that are using or soon will be using blockchain technology is available here.

Meanwhile, Standard Chartered announced in March 2019 that it had received a license to operate a virtual bank – a new standalone digital retail bank.

Bill Winters, CBE, who is chief executive of the bank, said:

“Each of the components we are putting into the bank from the core banking system upwards will either come from Standard Chartered as a ‘drag and drop’ or come from partners either as a product already developed or that they are developing along with us.”

“Hanging off the virtual bank will be dozens of APIs to allow partners to plugin. We are able to identify a customer need and quickly bring in the right partner. This is the way of the future for everybody. It is critical for us because we are not going to outspend JP Morgan or HSBC. We are targeting the millennial population, people who aspire to affluence and are ‘young’ by definition.”

The virtual bank will be a separate brand. But Standard Chartered will back it to bring in the strength of the brand.

The Standard Chartered virtual bank will launch in early 2020. However, it is not likely to be blockchain-enabled.

[Related Story: State Street on Blockchain: The Trickle of Digital Assets Will Soon Turn Into A Flood                           ]