SBI Holdings and TradeFinex Partner to Create a Trade Finance JV in Japan

Korean Lawmakers Make Progress on Virtual Asset User Protection BillOn Tuesday, the subcommittee for legal deliberations under the South Korean National Assembly’s National Policy Committee reached a consensus during the first review of the Virtual Asset User Protection Bill, according to Yonhap Infomax.©Pexels/Andrea PiacquadioFirst review phaseThe bill is undergoing a two-phase review process before being legislated. During the first phase, the primary focus was on safeguarding customer assets and preventing unfair transactions. The second phase is expected to concentrate on market order regulations, including the issuance and disclosure of virtual assets.Application of Capital Markets ActSeveral stipulations were included in the approved draft of the Virtual Asset User Protection Bill during the initial review phase. These stipulations include prioritizing the application of the Capital Markets Act to virtual assets that are classified as securities, while excluding central bank digital currencies (CBDCs) from the definition of virtual assets to avoid any potential confusion. The bill also seeks to impose compensatory damages and penalties for any unfair trading practices, and establish a virtual asset committee responsible for investigating any unfair transactions in the digital asset market.The virtual asset committee will also engage in preliminary deliberations regarding the management, supervision, and monitoring of the digital asset market. The committee will carry out tasks assigned to it by the Financial Services Commission (FSC). Furthermore, the Bank of Korea has been granted the right to request data from virtual asset operators since virtual assets, although not currencies, are necessary to consider when establishing monetary credit and financial stability policies.No class action systemHowever, the introduction of a class action lawsuit system was not adopted, and details about inspecting virtual asset operators will be stipulated in a presidential decree rather than a law.Second review phaseFor the second review phase, the FSC will report several matters to the National Assembly. These will involve tasks such as establishing a regulatory framework for stablecoins, security tokens, and utility tokens. In addition, the agency will be responsible for creating a regulatory system for virtual asset valuation, advisory, and disclosure services, as well as an integrated computerized system that provides reliable and reasonable information on digital assets. The FSC will also explore ways to enhance the business conduct discipline of cryptocurrency operators by commissioning research from external organizations.Additionally, the FSC and the Financial Supervisory Service will work on supporting virtual asset exchanges to establish uniform standards for the circulation supply of virtual assets. The regulatory bodies will also enforce the requirement for transparent disclosure and strict internal control on virtual asset operators. Moreover, regulations will be developed to enhance virtual asset usability and remove any obstacles that may impede the development of innovative real-life services.

Hong Kong Legislator Courting US Crypto Exchange CoinbaseRecently, Johnny Ng, a member of the Hong Kong Legislative Council, expressed his interest in the future development of Coinbase, a major US cryptocurrency exchange, in Hong Kong. In a tweet today, Ng said that he had been in contact with Coinbase and that he would keep the public updated on further progress.Photo by Ruslan Bardash on UnsplashNg’s invitation to crypto exchangesThis tweet follows Ng’s earlier invitation to Coinbase and other global crypto trading platforms to apply for licenses in Hong Kong. His comments are in line with Hong Kong’s efforts to become a hub for cryptocurrency and blockchain-related activities. As of June 1, a new licensing regime for centralized virtual asset trading platforms (VATPs) went into effect in the Chinese special administrative region.Differing opinionsDespite the enthusiasm shown by Ng, there are differing opinions on Hong Kong’s current suitability as a crypto-friendly jurisdiction. Leo Weese, the co-founder and President of the Bitcoin Association of Hong Kong, expressed reservations in an interview with crypto media outlet CoinDesk.Weese described Hong Kong’s current setup as “highly unattractive” for crypto businesses. He cited factors such as a relatively small and untested market, limited banking partnerships, and restrictive product offerings.Despite these challenges, Weese acknowledged some potential advantages, stating that Hong Kong’s classification of tokens as non-securities allows for the trading of securities that are deemed unregistered in other jurisdictions. It is important to note, however, that Weese cautioned against assuming that moving operations to Hong Kong would protect Coinbase from US regulatory measures.Moody’s altered outlook on CoinbaseMeanwhile, Moody’s, the American credit rating agency, recently revised Coinbase’s outlook from stable to negative, citing uncertainties surrounding the impact of the US Securities and Exchange Commission’s (SEC) charges on Coinbase’s operation as an unregistered securities broker.

Web3 Offers Potential for Japan to Rediscover its MojoEveryone recognizes that Japan has been at the forefront of innovation and the development of technology in the past but can it rediscover that cutting edge through Web3 and blockchain? In a recent interview with Forkast News, Yudai Suzuki, Co-Founder of a Tokyo-based Web3 incubator, suggested that it has that potential.©Pexels/邱 韬Re-establishing a competitive edgeSuzuki, who heads up Fracton Ventures, believes that such a pivot is possible for Japan in making Web3 the means through which it can rediscover the innovative edge it has been lacking in more recent years.Despite an historical strength and depth in technology and innovation, Japan has struggled when it comes to adopting and implementing new technology on a global scale more recently.Legacy techEarlier this year, it emerged that leading Japanese technology companies were collaborating with a view to creating a new open metaverse infrastructure called “Ryugukoku.” That project implicates the creation of a Japan Metaverse Economic Zone. Suzuki cites this project as demonstrative of a key issue relative to the overall development of Web3 in Japan.The project involves Japan’s legacy tech companies such as Fujitsu and Mitsubishi. He goes on to clarify that the majority of Web3 projects in Japan are being led by the existing technology behemoths despite the fact that Japan is seeing the emergence of a Web3-native generation.Suzuki identifies that one of the fundamental aspects of Web3 is that every decentralized autonomous organization (DAO) that’s created is immediately global in nature. Allied with that, most of that 18–25 year old Web3 native generation in Japan want to break through language barriers and communicate on a global basis.That outward looking characteristic is positive but it’s not how venture investment has traditionally worked in Japan. He explains that the conventional approach to investing in start-ups in Japan has been to first look to dominate the Japanese market before going global. The Fracton Ventures founder believes that this is a flawed approach in today’s world and that by the time they’ve gotten to number one in Japan, it’s already too late in trying to achieve that on a global basis.Government responsibilitySuzuki places much of the responsibility in affecting a more appropriate approach on the Japanese Government. “If they focus only on these huge Japanese companies, they will not succeed,” he says. He is also critical of the regulatory approach. Suzuki believes that “the government wants to change the laws and set new regulations at an early date,” and with that, such over-regulation has resulted in crypto entrepreneurs leaving the field. Regulation needs to be set on a more flexible basis so that it can be easily updated and upgraded as the technology develops.Global MindsetHe highlights the importance of having a global mindset and being open to different ideas and perspectives in order to succeed in the Web3 space. The entrepreneur points to that Web3-native demographic in Japan, explaining that their mindset has changed to a more global one as a consequence of dabbling in Web3. The same he believes is necessary on the part of the government if Japan is to become a leader in the tech industry once again.