Zand CEO: Banking Web3 Requires AI, Compliance Muscle and a New Cost Model

Zand may have started as the bank that enabled the UAE’s crypto ecosystem — but it is no longer building itself around virtual asset service providers. With digital asset custody, stablecoin issuance and cross-border expansion into Africa and Asia, Zand is positioning itself beyond the exchanges it once served. The question is no longer whether it complements the digital asset system — but whether it is moving to institutionalize it.

Banking Web3, as Michael Chan explains, is not about being crypto-friendly. It is about whether a bank’s systems can survive real-time programmable finance.

In an exclusive interview, the CEO of Zand Bank describes why serving digital assets inside a regulated banking system forces institutions to rethink compliance, infrastructure and cost models from the ground up.

“Zand is not a digital retail bank,” Chan says. “We are a digital wholesale bank.”

Serving Web3 Was the Entry Point — Not the Destination

Most UAE virtual asset service providers rely on Zand for banking access. But Chan makes it clear that Banking Web3 was never meant to stop at servicing exchanges.

“It’s not a matter of whether you want or don’t want,” he says. “It’s whether you can solve the settlement and compliance problem.”

Exchanges operate omnibus accounts. End-user KYC sits with the exchange, yet once crypto converts to fiat, compliance responsibility intersects with the bank.

“How can you ensure that the client of Exchange X is well KYC-ed?” Chan asks. “And how do you ensure that the activity is legitimate?”

By solving that structural mismatch, Zand stress-tested its architecture. Custody marked the next shift — moving from banking crypto businesses to holding digital assets directly within its regulated perimeter.

Stablecoins as Settlement Infrastructure

Zand’s AED stablecoin initiative reinforces that transition. “Stablecoin is not for the purpose of only crypto trading,” Chan says.

Instead, he frames it as cross-border settlement infrastructure.

“The real solving of the problem is not single currency. It is two stablecoins — Country A and Country B.”

The objective is programmable trade finance and real-time settlement — not exchange speculation. Zand’s collaboration with Ripple supports liquidity corridors for remittance and B2B flows, though Chan stresses that remittance is only one-use case.

Banking Web3, in this model, extends into trade corridors — not just crypto markets.

The Cost of Doing It Properly

When told that some in the market consider Zand expensive, Chan responded directly.

“We are not a charity organization,” he says. “People are mispricing the risk.”

Zand’s compliance team expanded from six officers to 21. Monthly assurance programs, independent audits, Travel Rule implementation and Web3-specific monitoring frameworks are built into operations.

“The expectation in the UAE is very high. You should not compromise any risk.”

Banking Web3, Chan argues, introduces structural cost layers that conventional banks often avoid by staying on the sidelines.

The Timeout Problem

The most revealing part of the interview concerned real-time screening.

“In traditional payments, it’s simple — sender, receiver, country, purpose, amount,” Chan says. “When you apply it to Web3, you multiply the complexity by five.”

Blockchain transactions settle quickly. Compliance systems must process wallet data, risk scoring and transaction patterns in milliseconds.

“If you want to have real-time screening, you must pass the transaction before timeout.”

If the screening engine cannot process that information fast enough, settlement fails — or monitoring fails.

“You cannot use conventional models to monitor Web3 activities.”

The divide between traditional banking and Banking Web3 is not ideological. It is computational.

Why AI Became Necessary

“Unless you invest in AI tools, it is impossible,” Chan says.

Zand’s digital-first identity lies in its tech stack — API-native architecture, elastic scaling and atomic settlement capability.

“We can do sub-millisecond settlement.”

But speed alone is insufficient. AI allows the bank to analyze blockchain data in real time, clear transactions before timeout and meet regulatory thresholds simultaneously.

In Banking Web3, artificial intelligence is not optional. It is infrastructure.

Beyond the UAE

Digital assets may have been the entry point, but Zand’s ambitions extend further.

“We are not only building a bank. We are building different pillars,” Chan says.

Those pillars include SME banking, expanded corporate services, AI-native financial products and geographic expansion beyond the UAE.

“We are not only having a UAE banking license. We will go beyond the UAE.”

If Zand’s early role was to provide banking access to the digital asset ecosystem, its current trajectory suggests something broader. Custody, stablecoin issuance and cross-border expansion indicate a shift from complementing Web3 to embedding itself within its institutional foundation.

Banking Web3, as Chan frames it, is not about enthusiasm. It is about architecture, compliance muscle and accepting that the cost model has fundamentally changed.