Hong Kong’s OSL crypto exchange receives $91M boost

Chinese Subsidiary of DBS Bank Launches e-CNY Product OfferingDBS Bank China, a cryptocurrency-friendly bank and subsidiary of the Singaporean multinational financial services firm DBS, has introduced a new solution for its customers in mainland China, facilitating transactions with the digital yuan.The bank has officially launched the digital yuan or e-CNY merchant solution, allowing businesses in mainland China to receive payments in the central bank digital currency (CBDC). The announcement of the new service offering was made via a press release published to the website of the parent company on Wednesday.Photo by Hanny Naibaho on Unsplashe-CNY settlementWith this new service, DBS clients in mainland China can receive the e-CNY and have it automatically settled into their CNY bank deposit accounts. DBS refers to this as a “merchant collection solution,” where the merchant collects the final amount in CNY directly into their bank deposit account. The solution aims to streamline the process by eliminating manual settlement procedures.Enabling CBDC functionalityThis innovative tool offers several advantages. It allows businesses to collect CBDC without the need for manual settlement processes. Moreover, the e-CNY’s capabilities enable users to receive payments in regions with limited internet connectivity, ensuring broader accessibility. The solution also provides reconciliation through consolidated merchant reports, with detailed e-CNY transactions available on DBS’ digital platform for business banking.The CEO of DBS Bank China, Ginger Cheng, announced that the first e-CNY transaction using the new solution has been successfully completed, involving a catering company in Shenzhen. Cheng emphasized that integrating a CBDC collection and settlement method into clients’ existing payment systems would position their businesses for a digital future where e-CNY becomes increasingly prevalent among Chinese consumers. She expressed the bank’s commitment to enhancing user experience and supporting China’s financial market innovation.Adoption pushChina has made substantial progress in promoting and expanding the digital yuan since its launch in 2019. The country’s central bank reported that there were 13.6 billion e-CNY in circulation, equivalent to approximately $2 billion, by the end of 2022.The digital yuan is currently accepted in 26 cities and 17 provinces across China, with further adoption expected as the program gradually expands to more regions. In recent days, another measure was taken to bring about everyday use of the digital yuan when the city of Jinan enabled use of the currency across its public transport system.DBS Bank has become actively involved in the digital assets space. In 2020, the bank launched cryptocurrency trading and custody services for institutional clients. In April of this year, it extended crypto trading services to its premier customers. The bank has also participated in various government-related blockchain initiatives in Singapore, including Project Orchid, Project Guardian, and Project Ubin.DBS is not the first foreign banking entity to collaborate with the Chinese relative to the digital yuan. Earlier this year, France’s BNP Paribas partnered with the Bank of China to promote the digital yuan to its corporate clients. The Chinese are clearly making every effort to promote use of the digital currency inside and outside of Chinese territory.

Hitachi collaborates with Concordium on biometric crypto walletJapan’s Hitachi Solutions, a subsidiary company of the Hitachi multinational conglomerate, has joined forces with the Concordium Foundation, unveiling a collaboration that centers on a state-of-the-art biometric crypto wallet.Photo by Nuno Antunes on UnsplashAlternative approach to securing cryptoAnnounced on Tuesday by the Concordium Foundation, a Swiss-based development team behind the Concordium layer one blockchain, this “proof of technology” initiative has the potential to fundamentally change how users access and secure their cryptocurrency accounts.Breaking away from traditional methods, the proposed biometric crypto wallet leverages users’ fingerprints or facial scans to generate a set of seed words, eliminating the need for users to store or remember them. This novel approach simplifies the restoration process, allowing users to recover their accounts with a mere biometric scan.Improving UXIf crypto and Web3 are to be adopted by ordinary people en-masse, user experience has long been identified within the sector as an area that still requires development. Making users responsible for the storage of a private key is fraught with difficulty, given the likelihood of private keys being lost or compromised.Various approaches are being taken to solve this issue. Tangem Wallet is one such alternative that utilizes near-field communication (NFC) in combination with an app and a card with an inbuilt chip, negating the need for the user to memorize a private key.This biometric-centered approach from Hitachi and Concordium represents another user-friendly approach to the problem of user authentication, harnessing the power of Hitachi’s Public Biometric Infrastructure (PBI) and Concordium’s self-sovereign identity framework. The result is an account creation process based entirely on biometric data, enhancing both security and user convenience.Complementary technologyConcordium’s network, with its stringent ID process for account creation to combat malicious activities, stands to gain substantial benefits from this technology. The biometric wallet will fortify users’ access to their IDs, a critical aspect of network security. Moreover, the technology’s applicability extends beyond Concordium, offering potential integration with any blockchain network.Users of the biometric wallet will have the flexibility to unlock their accounts either by regenerating seed words through a biometric scan or by decrypting a copy of the seed words. This dual-layered approach ensures that access is granted solely through the user’s unique biometric data, enhancing security and mitigating the risk of loss or theft.Developing this cutting-edge technology poses challenges, particularly in handling the inherent “fuzziness” of biometric data, where no two scans produce identical results, even from the same individual. Hitachi’s team addressed this by employing fuzzy key generation and specialized error correction technology, effectively distinguishing between scans.Unlike traditional crypto wallets that necessitate secure storage of seed words, the biometric wallet by Hitachi and Concordium, alongside solutions like multiparty-computation wallets and magic links, aims to overcome this hurdle. The goal is to resolve the issue of lost backup, a significant barrier to wider crypto adoption.This is not Hitachi’s first foray into the crypto/blockchain space. In mid-November the company announced a collaboration with the Japan Exchange Group (JPX), banking giant Nomura and Nomura portfolio company BOOSTRY to launch a $69 million digital green bond on the blockchain. In October Hitachi joined a consortium of Japanese companies with a view towards developing decentralized identity technology.

The launch of Hong Kong's inaugural spot crypto exchange-traded funds (ETFs) is expected to occur by mid-2024, according to one of Hong Kong’s leading crypto executives. Gary Tiu, the executive director and head of regulatory affairs at OSL, a licensed cryptocurrency exchange based in Hong Kong, made that assertion in discussion with The Hong Kong Economic Journal. Tiu provided the publication with insights into the accelerating pace of negotiations between cryptocurrency exchanges and fund companies in the region.Photo by Stella P on UnsplashUp to ten firms contemplating ETF launchOSL is actively engaged in discussions with multiple fund companies, with five to ten firms contemplating the introduction of spot crypto ETFs. Tiu revealed that certain firms have made notable progress, raising the possibility of the debut of these ETFs in Hong Kong by the middle of the year. Additionally, the OSL executive emphasized the significance of maintaining reasonable fees in collaborations between OSL and fund companies, given the limited presence of licensed crypto exchanges in the city – a total of two at present. This suggestion from Tiu aligns with similar recent soundings emanating from HashKey, another licensed crypto exchange in Hong Kong, which recently disclosed its ongoing discussions with asset managers exploring the potential launch of spot crypto ETFs. Livio Weng, the CEO of HashKey, indicated that approximately ten fund companies are considering the introduction of such ETFs in the city. VSFG’s ETF plansAligned with Tiu’s thoughts on the matter, according to a Bloomberg report last week, Venture Smart Financial Holdings Ltd (VSFG), a Hong Kong-based financial services firm, expressed plans to potentially launch a spot bitcoin ETF within the first quarter of this year. Bloomberg reported the company's goal of growing the ETF's assets under management to $500 million by the end of 2024. The regulatory landscape in Hong Kong is actively adapting to accommodate spot crypto ETFs, with the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) announcing in December that they have reviewed their existing policies. Two circulars were published, outlining the requirements for spot crypto ETFs, with the SFC stressing that transactions should be conducted through SFC-licensed crypto platforms or authorized financial institutions. Currently, Hong Kong has listed several futures-based crypto ETFs, including the Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF and CSOP Ether Futures ETF. Hong Kong venue for Bitcoin conferenceIn a related development, local lawmaker Johnny Ng revealed on social media on Monday that Hong Kong will host The Bitcoin Conference this year. Earlier this month Ng urged the local administration in Hong Kong to swiftly follow the United States' approval of spot bitcoin ETFs and position the city as a leading hub in the cryptocurrency space. With Hong Kong and Singapore vying for hub status in the Asian region relative to the digital assets space, the launch of ETF products would give the Chinese autonomous territory a competitive head start given that Singapore doesn’t appear to be close to accommodating crypto ETFs for the time being.