Upbit Singapore Gains In-Principle Approval for Major Payment Institution License

Japan’s largest bank is stepping deeper into digital assets at a moment of political change. Mitsubishi UFJ Financial Group (MUFG) and its securities arm Mitsubishi UFJ Morgan Stanley Securities (MUMSS) have launched a blockchain-based business, according to CoinDesk Japan. The move puts the country’s biggest lender at the center of a fresh push to bring regulated finance onto distributed ledgers while retail investors gain a new way to buy and trade tokenized products. MUMSS has begun offering bond security tokens, marking its formal entry into the security token market. At the same time, the firm introduced ASTOMO, a trading venue for retail investors built with Japanese fintech company Smartplus. The system will debut with real estate-backed security tokens. Individuals can invest from 100,000 yen (about $655) through a smartphone app. Under the partnership MUMSS will select and source the digital securities. Smartplus will run account management and build and operate the trading system using its Brokerage as a Service (BaaS) platform. MUFG also revealed that it has started preparing a public offering of subordinated bonds in token form. The bank intends the instruments to qualify as Tier 2 capital under international rules. The offering is expected to be the first of its kind for Japan’s banking sector. MUFG has submitted an amended securities registration statement to the Director General of the Kanto Local Finance Bureau in advance of the sale.Photo by Asm Arif on PexelsTakaichi’s victory sparks interest in Japan’s crypto pathThe corporate steps arrive as conservative lawmaker Sanae Takaichi rises to lead the ruling Liberal Democratic Party. She won the party election on Oct. 4 and is set to become Japan’s first female prime minister, with lawmakers expected to make the formal choice in the middle of this month.  Several industry voices see her leadership as supportive of digital assets, according to Cointelegraph. Elisenda Fabrega, general counsel at tokenization platform Brickken, said Takaichi’s victory might reshape how Japan perceives and regulates digital assets, reinforcing the country’s commitment to clear and reliable crypto laws. Maarten Henskens, chief operating officer at Startale Group and head of the Astar Foundation, chimed in to say that a looser monetary stance under Takaichi could keep liquidity flowing and drive greater investor interest in alternative assets such as cryptocurrencies. That optimism has already spilled into Japan’s equity markets. The Nikkei index has continued to soar since the leadership vote, reaching a record high of 48,580.44 on Oct. 9. Not all signals point in the same direction. A BeInCrypto report published before the election noted market predictions that Takaichi might also back tighter oversight. The report cited her March proposal to build a framework that lets financial institutions, including crypto exchanges, share information on suspicious transactions. That system would support faster account freezes. Nikkei 225 Index Source: Google FinanceLoose fiscal tone brings new pressures for BitcoinFrom a broader economic view, the picture looks more complex. CoinDesk reported that Takaichi’s preference for easy Abenomics-style policies could weigh on Bitcoin in the short term. Expansionary fiscal measures tend to increase bond supply and drive yields higher, which often curbs risk appetite by raising borrowing costs and making assets like stocks and cryptocurrencies less appealing. Her stance has also reduced expectations for a Bank of Japan rate hike, weakening the yen and strengthening the U.S. dollar. The stronger dollar has cooled Bitcoin’s momentum, while gold has continued to attract investors seeking stability. MUFG’s blockchain venture arrives at a turning point for Japan. The bank’s push into tokenized assets shows how traditional finance is adapting to digital change just as new leadership tests the balance between innovation and control. Whether this marks the start of a broader transformation will depend on how policy, regulation, and investor confidence evolve together in shaping Japan’s financial future. 

The recent 19b-4 approval of spot Ethereum exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) is putting pressure on South Korean financial regulators to revisit their policies on digital assets. The SEC's decision to allow ETFs for Ethereum, the world's second-largest cryptocurrency, on May 24, 2024, follows its earlier endorsement of Bitcoin ETFs in January 2024. This move is seen as a significant step in merging traditional finance with the digital asset sector.Photo by DrawKit Illustrations on UnsplashKorean regulatory cautionIn contrast to the progressive stance in the U.S., the Korean Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have maintained a cautious approach regarding the integration of crypto assets into traditional securities markets. According to current regulations under the Capital Markets Act, ETFs in Korea are limited to traditional underlying assets such as financial instruments, securities, international currencies and commodities. These foundations are crucial for the creation of financial derivatives, leaving little room for digital assets under current laws. Calls for regulatory reforms and market implicationsThe decision by the SEC is expected to influence the Korean regulators to update their views on digital assets, according to local media and industry experts. Jung Eui-jung, the head of the Korean Stockholders’ Alliance, has advocated for Korea to emulate the U.S. by approving Bitcoin and Ethereum ETFs. He expressed concerns that continued regulatory hesitance could lead to investor funds migrating to more progressive markets like the U.S., potentially positioning the U.S. to broaden its crypto market further. Xangle, a digital currency data provider in Seoul, has also criticized the current regulations as outdated, emphasizing the need for revisions to accommodate the increasing relevance of digital assets in global finance. 

Korean Travel Rule Solution Provider CODE to Start Charging Monthly Fees Next MonthSouth Korean Travel Rule solution provider CODE, established in collaboration between local cryptocurrency exchanges Bithumb, Coinone, and Korbit, has announced the implementation of service fees starting next month. Up until this point, CODE has been offering its services free of charge. The notification regarding this change was issued to CODE’s clientele, which includes various crypto exchanges, as reported by local tech news outlet Digital Daily.Photo by Kenny Eliason on UnsplashTravel RuleThe Travel Rule regulations, set by the Financial Action Task Force (FATF) and Korean legislation, require Korean trading platforms to maintain records of both the sender and recipient’s information for virtual asset transactions exceeding 1 million KRW ($780). The FATF, founded in 1989 and headquartered in Paris, is an international financial watchdog dedicated to combating global money laundering and terrorist financing.More competitive priceCODE is anticipated to offer its services at a more competitive price of 1 million KRW ($780), in contrast to its rival VerifyVASP (VV), which introduced a monthly fee of $1,800 earlier this year. VV is a product developed by Lambda 256, a subsidiary of Dunamu, the parent company of Upbit, the largest cryptocurrency exchange in Korea.CODE launched its services in March last year. Among its crypto exchange members are Gopax, Cashierest, and Coredax. In December, the Travel Rule solution provider appointed Lee Sung-mi, the former compliance officer of Bithumb, as its new CEO, and since then, it has accelerated its monetization plan. Prior to Lee’s appointment, Coinone CEO Cha Myung-hun had been at the helm of CODE.