South Korea Embarks on Wholesale CBDC Pilot Program

Upbit D Conference participants share insights on Web3 and blockchainBlockchain specialists from 29 countries gathered on Monday (local time) at Upbit D Conference (UDC) 2023 in Seoul to explore capital markets in the forthcoming Web3 era. This era is characterized by user-controlled, communal data management, a notable shift from the Web2 space where major tech corporations held dominant control over data.Organized by Dunamu, the operator of South Korea’s Upbit cryptocurrency exchange, the conference featured 39 experts, focusing on the transformative potential of blockchain technology in this new internet phase.Photo by Shubham Dhage on UnsplashAsset tokenization and investment opportunitiesAccording to a report by the Asia Business Daily, one of the key speakers at the conference, Wally Yu, a Solutions Architect at San Francisco-based Chainlink Labs, delved into how cross-chain solutions and asset tokenization could add to the financial industry. He explained that Chainlink’s Cross-Chain Interoperability Protocol (CCIP), designed to connect various blockchains, is only beginning to reveal its capabilities in integrating with traditional financial markets. Yu pointed out the growing interest from banks in tokenizing their conventional assets and transferring them to the blockchain. This move, he suggested, could lead to increased liquidity and open up new investment opportunities.Yu also compared the current DeFi market to traditional sectors like stock, real estate, and derivatives, noting DeFi’s relatively smaller scale. However, he underlined blockchain’s transparency as a key advantage over traditional markets, where transparency is often lacking. According to Yu, the adoption of blockchain by traditional financial firms could address longstanding issues more effectively.Looking ahead to the Web3 era, Yu envisioned a scenario where different tokens are interconnected, potentially bringing an estimated $900 trillion worth of assets onto the blockchain. This, he believes, would significantly enhance liquidity in the financial markets.From Web2 to Web3During the conference, Korean mobile network provider SK Telecom’s (SKT) Vice President, Oh Se-hyun, outlined the company’s forward-looking strategy to transition its 30 million subscribers from Web2 to Web3. She highlighted SKT’s search for high-value markets to expand its business scope, underscoring the company’s active efforts in constructing Web3 infrastructure. This strategic pivot aligns with their vision for the upcoming Web3 era.SKT, which established its Web3 division in 2017, initially engaged in developing a private mainnet. However, the company has since shifted its focus towards services aimed at boosting customer engagement, such as custody, web and app services. Oh emphasized the need for Web3 wallets to support a diverse range of assets and decentralized applications (dApps), but she stressed that ease of use is paramount. She views that these wallets will serve as gateways for customers entering the blockchain space.SKT has developed and is improving its own Web3 wallet, dubbed Wallet T. Oh shared her belief that the future of financial business models will pivot from traditional and big-tech banks to those based on public chains. In preparation for this shift, SKT is contemplating strategies to embrace blockchain-based Web3 services.Crypto regulationThe conference also touched on the potential integration of virtual assets within regulatory frameworks. There’s growing anticipation in the market for the approval of spot bitcoin exchange-traded funds (ETFs) by the United States Securities and Exchange Commission, especially following the inclusion of asset manager BlackRock’s proposed spot bitcoin ETF in the Depository Trust and Clearing Corporation’s (DTCC) clearing-house eligibility file.Emily Parker, Executive Director at CoinDesk, mentioned that a spot bitcoin ETF is on the horizon in the U.S. She anticipated that such a development would not only boost cryptocurrency prices but also positively impact the market for non-fungible tokens (NFTs). Echoing this sentiment, Oh Se-hyun from SKT predicted that the approval of a spot bitcoin ETF could unlock access to a $30 trillion market.SKT’s Oh also addressed the complexities surrounding the regulatory landscape for cryptocurrencies. She acknowledged the challenge facing authorities in developing these regulations all at once, highlighting the gradual progress in this area. She cited the outcome of Ripple’s lawsuit in the U.S., which resulted in Ripple’s XRP tokens being classified differently for different investors: as a security for institutional investors but not for retail investors. Additionally, Oh pointed to the upcoming Markets in Crypto-Assets Regulation (MiCA) in the European Union, slated for implementation in December 2024. She emphasized that the establishment of such regulatory guidelines brings clarity and reduces uncertainty, which can be reassuring for businesses operating in the crypto space.Providing further insights into this matter, Kim Gap-rae, a senior researcher at the Korea Capital Market Institute (KCMI), spoke about the importance of regulatory clarity in the cryptocurrency sector. He pointed out that it’s more crucial for governments to have clear regulations rather than focusing on the extent of regulation. Understanding new regulatory or legislative trends is essential for governments as they look to develop new infrastructures.According to Kim, a potential spot bitcoin ETF approval in the U.S. could prompt South Korea to consider a similar approval. However, he noted that Korea currently lacks a regulatory framework for Bitcoin custody, which could lead to a competitive environment among crypto companies in the country. Kim believes that a deeper understanding of custodian regulations will enable better adaptation to new types of ETFs and foster their growth in Korea.

Carrieverse, a South Korean blockchain gaming project based in the Metaverse, launched its global version on March 28. Since then, the game has reportedly seen over 100,000 daily active users (DAU) every day, hitting 150,000 DAUs on its first day of release. The DAU index and related infographics were released by Carrieverse on April 1, according to the local media outlet Kyunghyang Games.  A joint venture between Carriesoft and Mantisco, this blockchain-enabled metaverse platform provides users with various content centered around the life of the game's main character, "Carrie," and her friends. At the heart of the project lies the “Play, earn, and own” model. Aside from the content backed by the "Carrie and Friends" intellectual property (IP), the project has expanded its footprint by launching the Cling Wallet, the NFT project "Kola from the Space" and the crypto game "Superkola Tactics."Photo by GuerrillaBuzz on UnsplashUsers from Southeast Asia and Latin AmericaAccording to data provided by Carrieverse, a significant portion of its users come from Southeast Asian and Latin American countries. Notably, in Indonesia and Vietnam, Carrieverse ranked second and third respectively in the newly released game section of their Google Play Store. The game generated the 15th-largest revenues of all games played in the Philippines and the 16th-largest revenues in Thailand. Carrieverse is reportedly on the top 100 casual games on Google Play Store across 86 countries.  The game also topped the trending chart on the global blockchain ranking site "PlayToEarn" on the day of its global launch, securing second place as of the following Sunday.  Building a robust IP-based metaverse platform The CEO of Carrieverse, David Yoon, said that Carrieverse strives to lead the Korean blockchain gaming industry and contribute to Korea's reputation as a Web3 powerhouse. Yoon said, "A sound ecosystem is being created due to the increase in on-chain data such as wallet generation and conversion of the governance token $CVTX, as well as the increased incineration of Celeb, which can be exchanged for $CVTX. The value of the game and $CVTX will continue to rise further." Carrieverse has also announced plans for various large-scale IP collaborations with other companies, intending to become an IP-based metaverse platform with high DAUs.  

Korean Crypto Exchange Alliance Launches Its Official WebsiteThe Digital Asset eXchange Alliance (DAXA), which comprises South Korea’s five major cryptocurrency exchanges Gopax, Bithumb, Upbit, Korbit, and Coinone, announced the launch of its official website on Tuesday.Photo by Markus Winkler on PexelsWebsite structure and featuresThe website has three primary sections: Introduction, News, and Archives. The Introduction section provides comprehensive information about the exchange, including a greeting from Chairman Lee Sirgoo, who also serves as the CEO of Upbit’s operator Dunamu. It also presents an organizational structure, details of the corporate identity, and links to each individual exchange.The News section provides users with announcements, press releases, and event information. Meanwhile, the Archives section houses educational videos, institutional reports, and a list of important statutes and regulations.Mitigating information disparityDAXA Vice Chairman Kim Jae-jin said the website would offer easy access to information concerning digital assets and the alliance’s self-regulatory measures. She mentioned the group’s commitment to investor protection, focusing on addressing information asymmetry.In addition to the website, DAXA runs a Youtube channel, with its first video uploaded in January of this year.Controversy surrounding the allianceEarlier this year, DAXA faced backlash after it implemented a new clause in its guidelines, which disallowed the re-listing of cryptocurrencies that had been removed from its member exchanges for a period of one year. Critics claimed that DAXA’s guideline was unclear and voiced concerns about the Alliance’s growing influence in the crypto sector. These worries are amplified by the fact that the member exchanges of DAXA command 98% of the crypto trading volume in Korea.