Politician Responds as Buterin Questions Hong Kong’s Crypto Credentials

Kazinform, the state-owned official news agency of Kazakhstan, has reported that the central Asian republic is working towards the establishment of a national crypto reserve. The news agency revealed that in answering an inquiry from a member of the Kazakhstan parliament, Timur Suleimenov, Governor of the National Bank of Kazakhstan, said that the central bank is currently studying information related to the formation and management of a national crypto reserve. Photo by engin akyurt on UnsplashFollowing best international practicePlans are being devised for a crypto reserve on the basis that best international practice as applied to sovereign wealth fund management is adopted. In this respect, guidelines related to transparency of accounting and secure crypto custody will be followed. The reserve will be established through an affiliate entity of Kazakhstan's central bank, specializing in alternative investments. In responding to the parliamentary inquiry, Suleimenov also revealed the likely source of funding for the fund. He stated: “International practice shows that the sources for such a reserve may include confiscated crypto-assets, as well as  cryptocurrencies mined by a crypto miner partially owned by the government.” Suleimenov outlined that while crypto assets have proven to be volatile and riskier than other asset classes, having the reserve controlled and managed by a central bank affiliate would result in the required levels of risk management and overall oversight being applied. According to Kursiv, a news organization focused on the Central Asian region, the authorities in Kazakhstan plan to amend relevant legislation so as to enable the effective management of the crypto reserve. Suleimenov stated that the central bank is open to discussing potential legislative amendments with members of Kazakhstan's parliament. The National Bank of Kazakhstan's governor also warned that misinformation by pseudo-business coaches related to cryptocurrencies needs to be curbed. He feels that in order to protect investors, and particularly young people, legal measures will be necessary in an effort to bring about greater transparency within the country’s crypto market. The authorities in Kazakhstan currently have a crypto regulatory framework in place that requires crypto trading platforms that extend their services to local users to have acquired a trading license from the Astana International Financial Centre (AIFC).  In May, it emerged that the Central Asian republic is planning to establish a pilot project for cryptocurrencies called “CryptoCity.” At the time, Kazakhstan’s president, Kassym-Jomart Tokayev, delivered a speech at the Astana International Forum outlining that the CryptoCity project would facilitate the use of crypto for the payment of goods and services within a specific geographical zone. Crypto hub potentialEarlier that month, the country’s First Vice-Minister of Digital Development, Innovation and Aerospace Industry, Kanysh Tuleushin, said that Kazakhstan had the potential to emerge as a leading cryptocurrency hub within the Central Asian region. Following the implementation of a ban on crypto mining in China in 2021, Kazakhstan experienced an influx of miners, attracted by cheap electricity. However, the arrival of miners was unplanned for, putting extreme pressure on the local electricity grid, resulting ultimately in brownouts and protests. The country once accounted for 27% of global Bitcoin mining. However, regulations introduced in 2023 led to the activity being scaled back considerably.

Japan is taking steps to approve exchange-traded funds (ETFs) tracking spot cryptocurrency prices, a regulatory shift that could take effect as early as 2028, according to a CoinPost report citing a Jan. 25 article by Nikkei.Photo by Jezael Melgoza on UnsplashThe timeline reflects the legislative steps required before retail investors can access digital assets through traditional brokerage accounts. Japan’s financial regulator, the Financial Services Agency (FSA), plans to amend investment regulations to permit cryptocurrencies as eligible assets for investment trusts. SBI, Nomura prepare crypto productsAccording to the report, major financial heavyweights, including SBI Holdings and Nomura Holdings, are already developing products in anticipation of regulatory approval. If cleared by the Tokyo Stock Exchange, the listings would allow Japanese investors to trade Bitcoin products alongside standard stock or gold ETFs. Institutional interest appears robust. A Nikkei survey conducted in November identified six major firms weighing the development of crypto investment trusts: Nomura Asset Management, SBI Global Asset Management, Daiwa, Asset Management One, Amova, and Mitsubishi UFJ. These companies are reportedly exploring products tailored for both retail and institutional clients. However, the 2028 target is largely dictated by the pace of tax reform. Government plans call for crypto profits to be taxed at a uniform 20%, replacing the current progressive system and putting digital assets on the same footing as equities and foreign exchange. The revised tax treatment would also apply to crypto ETFs and derivatives. At present, crypto gains are treated as miscellaneous income, leaving investors subject to progressive tax rates that can climb to roughly 55% once local levies are included. Crypto market slides amid volatility As Japan maps out its long-term regulatory course, recent market activity has been volatile, tied to potential currency interventions and U.S. political uncertainty. Bitcoin briefly surged to $91,000 over the weekend, a move CoinDesk reports some traders attribute to suspected Japanese intervention in the foreign exchange market. The theory suggests a transient reversal in the yen’s recent weakness forced an unwinding of leveraged carry trades, temporarily boosting the world’s largest cryptocurrency. However, the momentum was short-lived. Bitcoin is currently trading near $87,500, down 1.45% over the previous 24 hours. Market sentiment has been dampened by fears of a U.S. government shutdown and renewed trade tensions. On the prediction market platform Polymarket, participants have priced in a 78% chance of another government shutdown by Jan. 31. Compounding investor anxiety are President Donald Trump’s tariff threats. Trump recently warned he would impose 100% tariffs on Canada should the U.S. neighbor sign a trade deal with China. Canadian Prime Minister Mark Carney has since announced that Ottawa has no plans to forge such an agreement, according to CNBC. Monetary policy remains a headwind for risk assets. Ahead of the Federal Reserve’s interest rate decision this week, the CME FedWatch Tool indicates traders expect the central bank to hold rates steady in the 3.5% to 3.75% range at the Jan. 28 meeting. Markets are pricing in only a 2.8% chance of a 0.5% cut. The prospect of rates remaining unchanged offers little incentive for investors to pivot aggressively toward riskier assets like crypto. Gold, silver reach record levels This risk-averse environment has funneled capital into precious metals, driving prices to record levels. Both gold and silver have hit all-time highs, surpassing $5,000 per ounce and $106 per ounce, respectively. Amid the uncertainty, retail investors in neighboring markets are showing caution. In South Korea, a weekly survey by CoinNess and Cratos of 2,000 respondents found that 43.2% of investors are holding existing crypto positions without making additional purchases. Another 22.7% said they are actively trading, while 21.4% reported having no current position and waiting for a more favorable entry point. The remaining 12.7% said they are staying out of the market entirely. 

UAE’s Royal Office Visits Korea to Further Security Token Collaboration with AIITONEAIITONE, a Korea-based augmented reality firm specializing in security tokens, invited journalists to showcase its strategy to foster business collaborations between South Korea and the United Arab Emirates (UAE) on the occasion of the Korean visit of the Private Office of His Highness Sheikh Ahmed Bin Faisal Al Qassimi.Photo by Ethan Brooke on UnsplashPrivate Office’s return visitThe Private Office is a Dubai-based corporate conglomerate that operates businesses in various areas including real estate, energy, and finance. This visit by the Private Office marks a return visit following AIITONE’s visit to the UAE in July.The conference took place at a hotel in Gangnam, Seoul, and was attended by Lee Jin-yeop, CEO of AIITONE; Bruce Jeong, Chairman of Middle East Investment; and H.H. Sheikh Ahmed Bin Faisal Al Qassimi.Security tokens, CBDCs, smart defenseChairman Jeong, leading AIITONE’s global initiatives, said that their primary endeavor is to set up a Korean branch of the Royal Office. This branch will function as an international business hub, facilitating collaborations across three key sectors: security tokens, central bank digital currencies (CBDCs), and smart defense ventures.The event also featured presentations by AIITONE officials who introduced the company’s focus areas.Kang Man-soo, who leads AIITONE’s defense unit, highlighted the company’s technical expertise in maintenance training equipment, interactive electronic technical manuals, and integrated system support. He pointed out that AIITONE has been actively involved in the development of technical manuals and training simulators for various defense assets, including warships, guided weapons, and fighter aircraft. Kang emphasized that AIITONE’s strategic partnerships with Korean defense firms have propelled their engagement in initiatives aimed at exporting these products to countries such as Indonesia, Malaysia, and Poland.Lee Joo-hyung, the head of AIITONE’s extended reality (XR) content division, revealed the company’s plan to create portable products that can replicate the physical sensations of the real world, including sensations like physical contact and heat. Additionally, Lee introduced MOUM, a metaverse platform that features blockchain-powered security functions and generative artificial intelligence (AI) capabilities.Park Sang-il, who is at the helm of the firm’s security token project, showcased AIITONE’s comprehensive security token platform, which enables users to both issue and distribute security tokens. Notably, the platform is compatible with hyperledgers Besu and Fabric.Since arriving in Korea last Wednesday, the Royal Office has met with representatives from Standard Chartered Bank Korea and lawyers from law firm Kim and Chang, as well as lawmaker Yang Hyang-ja. Additionally, the Royal Office made a visit to smart farms located in South Jeolla Province.H.H. Sheikh Al Qassimi expressed a high regard for South Korea, acknowledging its beautiful natural landscapes and significant economic development. He underlined that this visit serves as an opportunity for the Royal Office to strengthen cooperation between UAE companies and their Korean counterparts, further fostering economic exchanges between the two countries.