Surge in Hong Kong Crypto License Applications from Mainland-Linked Brokers

Siam Commercial Bank (SCB), Thailand’s oldest bank and fourth-largest lender, has launched a cross-border payments service which depends upon the use of stablecoins.  The project is the culmination of a collaboration between SCB, SCB 10X, the disruptive technology investment arm of the SCBX Group, payment solutions provider Lightnet and blockchain development platform Fireblocks. It has successfully completed its testing phase within the Bank of Thailand’s regulatory sandbox, moving forward to the commercialization phase. According to Indian news portal Business News This Week, SCB launched the cross-border payments solution on October 16 in an effort to get out ahead of its TradFi peers relative to banking and financial services innovation.Photo by allPhoto Bangkok on PexelsFaster with lower costsThe service will enable 24/7 transfers on an international basis for the bank’s retail users. In accessing the service, users may use local currency to make transactions. Ordinarily cross-border payments implicate a number of steps in order to complete clearance, including the need to effect a currency conversion. Furthermore, banks need to maintain nostro/vostro accounts with foreign banks to complete such transfers.  In this instance, the bank is claiming that transactions using the service will be much faster than existing cross-border transfer options. The clearance and settlement process will be far more efficient in terms of the time required and the liquidity requirements. Pre-funding required in the legacy process has been eliminated, reducing capital requirements, while operational costs have also been reduced. SCB’s First Executive Vice President and Head of Digital Juristic and Payment, Thanawatn Kittisuwan, commented on the development, stating: “By integrating blockchain technology, the project promises a more efficient, reliable, and accessible solution for cross-border transactions. By leveraging blockchain technology and stablecoins, we are making cross-border remittances more efficient, reliable, and accessible for everyone. SCB has a long-standing tradition of embracing innovative technologies to enhance our financial services. This latest collaboration with Lightnet and Fireblocks builds upon SCB’s history of pioneering fintech solutions. ” Improved customer experienceLightnet CEO Tribodi Arunanondchai suggested that the new service will provide significant improvements to customers’ experience in cross-border money transfer. He added that the service “promotes financial inclusion as there is a lower capital requirement per transaction,” while strengthening Thailand’s position as an ASEAN (Association of Southeast Asian Nations) financial hub.  SCB and Lightnet first partnered in 2020. At that point, the duo envisaged that there was scope to cooperate in order to facilitate payment processing and frictionless real-time remittances to Thailand from any point overseas with low fees. Lightnet relies upon the Velo Protocol to enable its remittance services. Back in 2022 the firm received a $50 million commitment from LDA Capital, with Lightnet earmarking the funding to boost cross-border payments over the Velo protocol. For its part SCB has demonstrated its interest in crypto beyond this Lightnet collaboration. In 2023 the bank struck a deal with South Korean crypto venture capital firm Hashed, with the objective of pooling resources and researching and exploring how best to deploy any research outcomes relative to the company’s affiliates. The bank has also been involved in developing an application for Thailand’s central bank digital currency, the digital baht.

Bybit CEO Applauds Hong Kong and UAE Regulatory ApproachesBen Zhou, the CEO of Dubai-based crypto spot and derivatives trading platform Bybit, has recently lauded the regulatory approach of Asian and Middle Eastern countries.In a recent interview with CoinDesk, Zhou singled out Hong Kong and the United Arab Emirates (UAE) in particular, while also drawing attention to the contrasting approach taken to regulation of digital assets in North America, particularly Canada.Photo by Alex King on UnsplashDiffering regulatory approachesThe Bybit CEO believes that the tone set by regulators towards the crypto industry differs significantly between regions, with Asia and the Middle East displaying a more collaborative and supportive stance compared to North America. He perceives a shift in the attitude of regulators, seeing cryptocurrencies as an opportunity rather than a crisis.Praising Hong Kong and Dubai Regulators, Zhou highlights Hong Kong’s aggressive efforts to attract crypto companies by tapping into the talents within the industry. While recognizing the common goals among regulators worldwide, he notes that Dubai’s crypto regulatory framework has advanced even further than Hong Kong’s.Bybit’s strategic moves underline Zhou’s praise for these regions’ regulatory environments. On April 1, Bybit announced plans to establish its core operations in Hong Kong, positioning its research and development (R&D) and marketing teams in the Chinese autonomous territory.Subsequently, on April 17, Bybit officially unveiled its headquarters at the Dubai World Trade Center, a year after receiving in-principle approval to operate its crypto asset business in the UAE.Canadian market exitHowever, Bybit faced challenges in Canada due to its evolving regulatory landscape. While the company claimed not to operate in the United States, it had onboarded customers in Canada in the past. The situation changed in May when Bybit withdrew its services from Canada following the fallout from the FTX exchange scandal in November 2022.The regulatory environment became increasingly stringent, prompting Bybit to exit the Canadian market. Despite having ongoing conversations with Canadian regulators and receiving an invitation to apply for a crypto license, the restrictions on stablecoin usage played a significant role in the company’s decision to withdraw.Fifth most popular exchangePresently, Bybit ranks as the fifth most popular crypto exchange in the world, according to a report by CoinGecko for the second quarter of 2023.The company has been extending out its product offering, recently entering the crypto lending arena. Towards the end of May, the business received “in-principle” approval from the Astana Financial Services Authority (AFSA) to operate as a digital asset trading business and digital asset custodian in Kazakhstan.In June the crypto exchange followed the lead of other global crypto platforms such as Crypto.com and Binance by integrating artificial intelligence-driven trading tools into its platform for the benefit of its users.As the crypto sector continues to evolve, the differing regulatory approaches in different regions will play a crucial role in shaping its future. Bybit’s CEO, Ben Zhou, advocates for collaboration between regulators and crypto companies, emphasizing that viewing cryptocurrencies as an opportunity will foster innovation and growth in the industry.

Metaplanet Inc., a Tokyo-listed crypto investment and consulting firm, has announced its adoption of Bitcoin as its strategic treasury reserve asset. This decision comes in response to the ongoing economic challenges facing Japan, including high government debt levels, prolonged negative real interest rates, and a weakened yen. Japan currently faces significant economic adversity, with the highest government debt-to-GDP ratio among developed countries at 254.6%, according to the International Monetary Fund. Despite the government's decision to raise interest rates in March, the Japanese yen experienced a sharp decline to its lowest level in 34 years last month, as reported by Reuters.Photo by Takashi Miyazaki on UnsplashBitcoin as a store of valueMetaplanet Inc. highlighted Bitcoin's attributes as a non-sovereign store of value that has demonstrated appreciation against fiat currencies. The firm noted that Bitcoin's monetary policy is predetermined and immutable, with a maximum supply of 21 million coins set to be reached by the year 2140. This characteristic distinguishes Bitcoin from traditional monetary metals and other cryptocurrencies subject to centralized control. Strategic approachIn its official release, Metaplanet Inc. stated its intention to leverage a variety of capital market instruments to enhance its bitcoin reserves. As of May 10, the company reportedly held 117.7 BTC, equivalent to $7.2 million, according to data from Bitcointreasuries.net. This move reflects Metaplanet's strategic response to Japan's economic conditions and its commitment to diversifying and growing its assets in the cryptocurrency space.