Looking to accelerate its growth in the new economy, HashKey Group, a digital asset management and finance group headquartered in Hong Kong, sought a banking partner that could bring its operations to the next level.
Specifically, the group needed expert support for two of its business arms – HashKey Exchange, a virtual asset trading platform, and HashKey Capital, a global digital asset and blockchain leader helping institutions, founders and talents advance the blockchain industry.
For HashKey Exchange, it was important to have a service provider that could understand its business operations and facilitate its operational and customer flows, including meeting its FX requirements.
For HashKey Capital, it was critical to have a partner that could support the collection of investor funds and settlement with its investee companies and liquidity provider partners, especially with regard to the digital asset components of future fund launches in Singapore and Hong Kong.
The group chose to work with Deutsche Bank, which has extensive experience in servicing new economy companies, to solve its various pain points.
“From HashKey's perspective, they didn't have a banking partner that knew them well and who could potentially scale their business as they look at multiple markets,” explains Chintan Shah, Head of Corporate Coverage, APAC & MEA, at Deutsche Bank.
“There are constantly evolving client needs in the new economy space. They come up with new use cases, and it is important for them to have a banking partner to whom they can bounce those points and who will help them scale their business efficiently.”
The bank started servicing the group by first providing HashKey Exchange with own-money accounts (OMAs) to facilitate operational flows, including salary, tax and collection of fee revenue, as well as client-money accounts (CMAs) to facilitate customer flows. Deutsche Bank also provided the HashKey Exchange platform with virtual accounts to help identify the deposits of each customer, greatly improving reconciliation processes at the exchange.
As for HashKey Capital, Deutsche Bank opened accounts to support its existing funds and prepare for upcoming funds. These new accounts facilitate incoming investor monies into CMAs and the subsequent settlement with investee companies and liquidity provider partners.
All boxes checked
“Deutsche Bank checked all the boxes for us. Based on my conversations with people at the bank, I understand that they are looking for good clients at the forefront of the technology space and those working with new asset classes,” shares HashKey Singapore President & Hashkey Capital CEO Deng Chao. “The Web3 space and crypto industry are facing challenges. So, it is very important to forge a partnership with top-tier banks like Deutsche Bank which have a strong global presence and a strong reputation for compliance and regulatory expertise.”
These key solutions from Deutsche Bank resulted in major benefits for the two HashKey business arms. For HashKey Exchange, the bank's support allowed the platform to have clear oversight of the funds relating to the exchange flows. Deutsche Bank's FX4Cash module also provides HashKey Exchange with real-time rates and competitive margins that allow for seamless execution.
HashKey Capital, via the new account structure, was able to consolidate its funds in Asia without having to cater to European time zones.
Most important for the HashKey Group is having a service provider that will grow with them.
“Deutsche Bank provided good advice alongside their solutions and naturally everything clicked between the two of us. We are looking to explore more collaborations, which ultimately will improve our relationship with clients by allowing us to provide a variety of in-depth services,” adds Chao.
Indeed, the partnership between HashKey Group and Deutsche Bank is expected to strengthen with the bank aiming to play a critical part in the digital finance group's operations. “We are looking at how much deeper we can go into their ecosystem. HashKey Group is keen for us to partner with some of their critical liquidity providers in their platform to further ease the settlement between them and their liquidity providers,” details Shah.
Best cash management solution
Deutsche Bank's holistic solution won the Best Cash Management Solution award at The Asset Triple A Treasury Awards 2024 in Hong Kong, highlighting how service providers can support the aspirations of new economy companies in Asia.
“We've been active in servicing the new economy segment. When you look at the type of companies in this segment, the virtual asset service provider is actually the most complex as banks and financial regulators look to understand their business model,” highlights Shah. “At Deutsche Bank, we've looked at this industry in a unique way, putting in place a team of subject matter experts in both the business and risk management functions. They are looking at how this will fit in a regulatory framework.”
This approach has won kudos from high-growth clients such as HashKey Group, which have seen the benefits of partnering with established financial institutions. “With Deutsche Bank's global presence and global service network, our finance team's trust and confidence have been boosted. Previously, we had to work with multiple banks across different regions, and now they work with Deutsche Bank to provide a whole suite of services,” emphasizes Chao. “I think also that our reputation and our trust from our users and our investors have been enhanced as they know we work with a reputable bank that focuses on service quality and also, importantly, security and safety."
