Bithumb records declining performance in Q3 amid market challenges and interest rate hikes

China’s GAPP proposes ban on gaming crypto token conversionChina’s gaming industry hit a significant speed bump on Friday as the General Administration of Press and Publication (GAPP) unveiled a draft proposing substantial changes to the regulation of in-game tokens, signaling a strategic shift in the country’s stance on digital currencies in gaming.Photo by blurrystock on UnsplashImplementing more stringent controlsThe proposed regulations by GAPP bring about a ban on the conversion of game tokens into physical goods or legal tender. These guidelines, spanning 64 articles, impose stringent requirements on gaming companies. These include mandatory licensing in China, a two-year data retention policy, adherence to national and socialist values in content and the eradication of anonymous user registrations.One significant aspect of the guidelines is Article 23, which specifically addresses the use of game tokens. It proposes restrictions on exchanging them for physical goods, services or legal tender.The regulatory landscape becomes more complex due to the ambiguity surrounding cryptocurrencies, which are not recognized as legal tender in China. Although a warning was issued about the risks inherent in non-fungible tokens (NFTs), they remain legal in China. NFTs feature prominently within blockchain-based gaming.Game providers are also confronted with new limitations on inducements, such as bonuses for registration or daily logins, and are mandated to implement measures against irrational consumer spending.Gaming sector falloutIn the wake of these developments, several Chinese tech giants experienced a significant market downturn in Hong Kong. Tencent, a global gaming powerhouse and one of China’s most valuable companies, saw a 12.4% drop on Friday, marking its worst day since October 2008. This decline erased a massive 367 billion Hong Kong dollars ($47 billion) from Tencent’s market value.NetEase, another gaming giant, witnessed a 25% dive in Hong Kong afternoon trade, recording its most substantial daily loss since its listing in June 2020. Additionally, Bilibili and Kuaishou, prominent players in video-sharing and short-video platforms, experienced declines of 9.7% and 7.2%, respectively, given their involvement in online gaming.Market uncertaintyWith this latest development, the future of gaming crypto tokens remains uncertain in China, with investor confidence having been hit hard. Putting the matter in context on Friday, Stansberry Research Analyst Brian Tycangco took to the X social media platform, stating:”Govt regulation will effectively render prevailing business models irrelevant due to uncertainty regarding monetization. Games are inherently reward-based and if you clamp down on the use of rewards/incentives, you turn an entire industry on its head.”The guidelines, open for public consultation until Jan. 22, 2024, have not yet been legally enacted. This time frame allows for feedback and potential adjustments before enforcement.Notably, the Web3 gaming sector has witnessed substantial activity, with approximately a million unique active wallets engaged daily over the past three months, according to DappRadar. Industry experts, including Yat Siu of Animoca Brands, anticipate a potential surge in user engagement, emphasizing the potential impact of these regulations on the gaming industry’s trajectory.

XPLA joins hands with Carbonated to spearhead mobile Web3 gaming eraXPLA, the layer 1 blockchain mainnet operated by South Korean gaming corporation Com2us Group, said Tuesday (local time) that it has entered into a strategic partnership with game developer Carbonated. Under the new deal, Carbonated plans to onboard its upcoming blockbuster games exclusively onto XPLA, pioneering a new landscape of global Web3 gaming.Photo by Jonas Leupe on UnsplashXPLA expands furtherThe XPLA mainnet hosts a diverse lineup of participants like Oasys, Animoca Brands, YGG, Blockdaemon, Cosmostation and LayerZero. These companies have been continuously onboarding their Web3 games such as Summoners War: Chronicles, Minigame Party, Ace Fishing: Crew, Idle Ninja Online and The Walking Dead: All-Stars. With Carbonated joining as the newest contributor, its portfolio has been further diversified.“Carbonated is a studio with world-class development capabilities,” said Paul Kim, the leader of the XPLA team. “Its upcoming project, with its Web3-optimized gameplay and global appeal, will significantly contribute to the expansion of the XPLA ecosystem.”Harnessing cutting-edge tech for Web3 game developmentEstablished in 2015, Carbonated boasts a team of developers and industry veterans from major gaming companies such as Electronic Arts, Zynga and Blizzard who focus on creating immersive mobile games that are optimized for the Web3 market using artificial intelligence (AI) technology and their own live-ops tech stack called Carbyne. Recognized for this innovative approach to game development, the company received Series A funding worth a total of $8.5 million from several investors like Andreessen Horowitz (a16z) and Golden Ventures. Its newest game, notable for its high-quality graphics and compelling storyline, is scheduled for global release in the first half of next year.

India’s Upcoming G20 Summit Bullish for CryptoThe upcoming G20 summit in Delhi, India, will mark the first-ever G20 summit hosted in South Asia. The G20 comprises 19 countries and the European Union. While the summit is focused on discussing critical issues related to the global economy, it will also include discussions on cryptocurrencies.©Pexels/Studio Art SmileCrypto policy precursor to mass adoptionRegulations and policy frameworks around crypto will be a significant topic of conversation at the summit, alongside discussions on international financial stability. India’s Finance Minister, Nirmala Sitharaman, confirmed that G20 nations are working towards creating an effective Standard Operating Procedure (SOP) for regulating crypto during the summit.India has been taking a systematic approach to regulate the evolving crypto space, as evidenced by the nation’s evolving stance on cryptocurrencies and the recently launched central bank digital currency (CBDC) pilot. With this in mind, the G20 summit in Delhi is expected to provide a platform for countries to discuss and collaborate on effective crypto regulations and policy frameworks.According to Gracy Chen, Managing Director of the Singapore-based Bitget cryptocurrency exchange, more work on policy relative to crypto in India is bullish for the development of the sector within the South Asian country. “India’s consistent growth in adapting to cryptocurrencies and forming newer policies around it has made it a hub for tech investments. With more development and a policy framework, we can expect higher mass adoption. The G20 summit will be bullish for crypto’s growth in India,” Chen told Indian weekly English-language news magazine, India Today.During the 2022 Budget discussions, the government of India proposed some significant changes to the taxation of cryptocurrencies. As a premium investment product, cryptocurrencies are known for their high volatility, and the government believed that they should be subject to a heavier tax burden. Specifically, they introduced a 30% tax on capital gains earned through the sale of digital assets, as well as a 1% tax on Tax Deducted at Source (TDS) for all crypto transactions.The tax on capital gains applies to all digital assets, and the government intends to track historical records to ensure compliance. Additionally, the 1% TDS is applied to every single transaction, regardless of its size or frequency. These changes were seen by some as a trial framework, and many in the crypto space hoped for greater leniency from the government in the future. However, it remains to be seen whether the government will revise these tax policies in the coming years.CBDC pilot projectsFurthermore, the Reserve Bank of India (RBI) has recently launched two CBDC pilots to test the feasibility of digital currencies in India. The first pilot is a wholesale CBDC, which is being conducted in collaboration with nine banks.The second pilot is a retail CBDC, launched in December, which is being tested in four major cities across India — Mumbai, New Delhi, Bengaluru, and Bhubaneswar. The goal of these pilots is to evaluate the potential of digital currencies in facilitating secure and efficient transactions, as well as to study the possible impact on the traditional banking system.By exploring both wholesale and retail CBDCs, the RBI is taking a comprehensive approach to CBDC development, which may inform future decisions regarding the adoption of digital currencies in India.Chen maintains that “discussions around cryptocurrency policy frameworks accelerate the possibilities of mass adoption in the region.” “With over 750 million internet users, India holds the potential to not just pilot but establish real-life crypto and blockchain use cases for the masses,” she added.