An offshore Chinese-owned virtual bank has entered the Malaysian space, with plans to offer Islamic financial services. And it looks like it will not be the only one.
Asia Digital Bank, licensed by Labuan Financial Services Authority (LFSA), has officially launched. Receiving its license from the offshore center back in November 2020, the digital bank is positioning itself as a virtual investment bank with a blockchain-powered self-financial servicing platform. It is targeting corporate clients with its digital asset management and trading services.
“After several months of intensive preparations, we have officially launched today and we strive to become the world’s leading digital asset operator through the development of an inclusive financial service platform for digital asset transactions, with advance digital financial technology as its core,” Asia Digital Bank’s CEO Chris Wang commented.
It is understood that the bank will be offering Islamic financial services. This does not come as a surprise as the bank is established by Asia Pacific Investment Bank (APIB), of which Wang is also CEO of. Owned by Asia Pacific Wenjing Financial Group in China, APIB, also licensed in Labuan, is a strong proponent of Islamic finance, an important stream of finance stakeholders have long touted as a significant investment driver for China’s ambitious Belt and Road Initiative.
Apart from offering Muslim-friendly financial services, APIB last September confirmed that it will also be launching the Islamic Digital Finance Fund in Malaysia to invest in Islamic fintech start-ups. The fund is in collaboration with a Malaysian boutique fund management firm, OUD Asset Management.
“APIB and OUD share the same vision of bringing together decades of investment expertise to invest in fintech start-ups with good potential. We will ensure we invest accordingly to Shariah principles to promote ethical, accountable and reliable investments,” Foo Yong Hooi, a director of APIB, said during the MoU signing between APIB and OUD.
This launch is indicative of the strong bilateral relations between Malaysia and China. Zhu Changhui, the director of the Nanjing Financial Regulatory Bureau, expressed his hope that Asia Digital Bank would strive to become an efficient, safe, and comprehensive digital financial service bank, while also playing its role as a bridge to actively participating and contributing to the deepening of cooperation between Nanjing and Labuan, China and Malaysia in digital finance and various other aspects of China-Malaysia financial relationships.
And it looks like Islamic finance would be a recurring theme. In fact, it was recently reported that another Chinese bank – Baxian Private & Investment Bank – was authorized by LFSA to operate as a full deposit-taking digital bank on a completely Shariah compliant basis.