UAE Accelerates Cross-Border Payments with JPMorgan’s Onyx

Zodia Custody Launches Crypto Custodian Service in DubaiZodia Custody, a subsidiary of British multinational banking services firm Standard Chartered, has entered the Middle Eastern market, bringing its crypto custody service to Dubai.In a tweet on Thursday, the start-up announced that its parent company Standard Chartered has signed a memorandum of understanding (MoU) with the Dubai International Financial Centre (DIFC) to launch digital asset custody services in Dubai, powered by Zodia Custody.The move will only go ahead once it has been approved by Dubai’s regulator, the Virtual Assets Regulatory Authority (VARA). At the MoU signing ceremony, Standard Chartered CEO Bill Winters stated: “We see digital assets as an important part of the future of financial services and we are committed to investing in the infrastructure and talent necessary to be a leader in this space.”“The UAE [United Arab Emirates] has a well-balanced approach to digital asset adoption and financial regulation, making it an ideal first market for us to launch our digital asset custody proposition,” Winters added.With 54 years in the financial services arena, the UAE is already home to Standard Chartered’s operations in the Middle East and North Africa (MENA) region.SBI joint ventureIts London-based subsidiary has been busy. In addition to this expansion into the MENA region, in February the fledgling company entered the Japanese market. It achieved that by partnering with Japanese financial services conglomerate, SBI Holdings. The Japanese joint venture company is 51% owned by SBI, while Zodia holds the remaining 49% minority stake. At the time, Julian Sawyer, CEO of Zodia Custody, said that “partnering with SBI DAH ensures the joint venture will offer gold-standard crypto asset custody services in Japan.”Capital injectionLast month, SBI Holdings stepped up its association with Zodia Custody by becoming the lead investor in Zodia’s latest funding round. Up until that point, Zodia had been supported largely by Standard Chartered. Northern Trust took a 10% stake with Standard Chartered accounting for the remaining 90% equity stake. Following that most recent funding round, SBI now moves up the rankings to become Zodia’s second largest investor.Zodia was founded in 2020 in tandem with a separately launched trading platform, Zodia Markets. Its objective was to offer a safe, trustworthy platform through which institutional clients could invest in crypto assets. As a UK-based entity, the firm is regulated by the UKs Financial Conduct Authority (FCA).Heightened digital asset developmentAuthorities in Dubai and within the UAE in general have been working hard in recent months with an eye towards making the country, and particularly its Dubai and Abu Dhabi Emirates, a hub for digital asset-related business. Regulators in Dubai, Abu Dhabi, and at a national UAE government level, have been progressing in terms of getting a workable digital assets regulatory framework and licensing regime in place.With the Dubai Fintech Summit having taken place earlier this week, there were further developments still relative to digital asset business in the UAE. On Monday, Coinbase CEO Brian Armstrong was in attendance alongside his executive team. Just like Armstrong, Ripple CEO Brad Garlinghouse was also a keynote speaker at the event. Both complemented the UAE on its regulatory approach to crypto off the back of both of them having been sharply critical of the regulatory approach in the United States. Armstrong indicated that his company is interested in establishing a base in Abu Dhabi while Garlinghouse confirmed that Ripple is opening an office in Dubai.Photo by Aleksandar Pasaric on Pexels

BNP Paribas Partners With Chinese in Digital Yuan PushThe Chinese authorities continue with their sustained efforts to promote use of the digital yuan, on this occasion by hooking up with French international banking group, BNP Paribas.According to the South China Morning Post (SCMP) on Friday, the partnership will see BNP Paribas collaborating with the Bank of China (BOC) to promote the digital yuan to its corporate clients. The digital yuan or e-CNY is a digital representation of the Chinese sovereign currency, issued by the BOC.Photo by Eric Prouzet on Unsplashe-CNY system accessAs part of the arrangement, BNP Paribas China will connect into the BOCs system, accessing an e-CNY management system. The BOC has authorized ten banks in China including the four state-owned banks, all of which are domestic lenders, to deal with its digital currency business.The direct e-CNY system access enables straight-through processing, allowing BNP Paribas to offer digital wallet functionality to its corporate clients relative to the digital yuan. Essentially, the system will allow BNP Paribas China’s corporate clients to link their bank accounts with an accompanying digital wallet. Other functionality that will be enabled as a consequence includes access to smart contract applications through the m-CBDC bridge (central bank digital currency).BNP Paribas China CEO CG Lai commented on the partnership: “While this collaboration can supplement the Bank’s offline payment collection capabilities and further optimize our clients’ account structure, this also reinforced the Bank’s commitment to the China market.” Lai outlined that the bank intends to enhance customer service capabilities by pursuing digital innovation that, like in this instance, contributes to China’s economic development.Louise Zhang, Head of BNP Paribas China Transaction Banking claimed that the partnership will “provide innovative, efficient cash management and trade financing services to local and multinational clients.”CBDC developmentThere has been a lot of activity in recent years when it comes to the development of CBDCs. The central banks of most nations have carried out some level of preparatory or investigative work relative to a digital currency. However, China has been by far the leader in its development of a CBDC.The BOC first began research into a digital currency in 2014. The country’s State Council approved the development of the digital yuan in partnership with China’s commercial banks in 2017. Beyond initial development, a testing phase began in 2019 with the project known as the Digital Currency Electronic Payment (DCEP) system emerging as the first version of the digital yuan after a number of years of development.In 2020, the BOC began more extensive testing of the digital currency in four Chinese cities — Shenzhen, Suzhou, Chengdu and Xiong’an. To promote use of the currency at that time, they offered free digital yuan to residents of those cities to spend, in that way, stepping up efforts to popularize the digital currency.Last month, the administrators of the Chinese city of Xuzhou announced that it was in the process of publishing a pilot scheme which will set out a means for promoting China’s e-CNY digital currency. Also in April, the eastern city of Changshu clarified that it is gearing up to commence paying state employees in the city in e-CNY. According to an announcement made by the city’s finance bureau the civil servants will start to receive e-CNY as payment in May.

Hong Kong Exchanges and Clearing Limited (HKEX), the operator of the Hong Kong stock exchange, has announced plans to launch a digital asset price index. The index which the company is marketing as the HKEX Virtual Asset Index Series, will aim to provide for the developing asset class, while complimenting Hong Kong’s overarching efforts to transform itself into a regional digital assets hub. The company announced details of the new product offering in a press release published to its website on Oct. 28. HKEX indicated that the product will go live on Nov. 15, outlining that the product “provides investors with transparent and reliable benchmarks for Bitcoin and Ether pricing in the Asian time zone.”Photo by Kanchanara on UnsplashReference index for Bitcoin (BTC) and Ether (ETH)The firm claims that the Index Series will include a Reference Index for Bitcoin (BTC) and Ether (ETH) while providing a Reference Rate for the two leading digital assets. The Reference Index will be formulated using a 24-hour volume-weighted reference spot price, with that pricing coming from leading virtual asset exchanges. The Reference Rate has been devised with the settlement of financial products in mind. As a result, it will be calculated on a daily basis at 16:00 Hong Kong time. From a compliance perspective, the product complies with the European Union’s (EU) Benchmark Regulation (BMR), being the first such product to be developed in Hong Kong. Additionally, the Index Series will be administered by CCData, a UK-headquartered data and index solutions firm formerly known as CryptoCompare.  Taking to the X social media platform, CCData outlined that the product is underpinned by its data selection process, leveraging its “Exchange Benchmark methodology to provide highly robust real-time and EOD  [end-of-day] reference rates.” The firm added that the offering will introduce “essential benchmarks for the Asian market,” while enhancing transparency and reliability within the digital assets sector, broadening opportunities for market participants across the region. Enabling informed investment decisionsHKEX CEO Bonnie Chan said that the company was pleased to introduce the HKEX Virtual Asset Index Series to meet the region's growing demand for this fast-emerging asset class. “By offering transparent and reliable real-time benchmarks, we seek to enable investors to make informed investment decisions,” she added.Like many other financial services firms in TradFi, HKEX has been getting itself acquainted with the blockchain and digital assets sector. In October of last year, the firm launched a blockchain-based settlement platform called Synapse. The platform relies upon DAML-based smart contracts. Earlier this year, a number of asset management firms launched spot Bitcoin and Ethereum exchange-traded funds (ETFs) on the exchange. In April, a report published by HKEX suggested that the true potential of crypto ETFs had yet to be fully realized, pointing out that a number of regulatory tweaks would be necessary to better support digital asset-based products. HKEX itself could have a greater role to play in the expansion of the digital assets sector in Hong Kong. Last month Hong Kong Legislative Council member Lee Wai-hung called on the platform to expand its range of derivatives, including crypto derivatives.