Ant Group Targets Web3 Developers With New Brand Launch

Conflux Network, a layer-1, regulatory-compliant Chinese blockchain focused on borderless transactions, has announced the upcoming launch of the Conflux 3.0 mainnet together with an offshore yuan-pegged stablecoin, resulting in its native CFX token surging.Photo by Eric Prouzet on UnsplashPartnershipA notice published on the website of the Shanghai Municipal People’s Government on July 20 reported on the Conflux Tree Graph Technology and Ecological Development Conference, which was held in Shanghai over three days from July 18 to July 20. Over the course of the three-day event, the project announced a partnership with AnchorX, a Hong Kong-based fintech firm specializing in stablecoins, and Shenzhen-based Eastcompeace Technology.  The purpose of the initiative is to develop a stablecoin pegged to the offshore yuan (CNH), the version of China’s currency that circulates outside the mainland. The report outlined that in recent years, stablecoins and tokenized real-world assets (RWAs) have come to global attention.  Belt & Road InitiativeGiven this backdrop, it was outlined that “creating an independent and controllable high-performance public chain system” could be of great benefit to China and its Belt and Road Initiative (BRI), which sets out to develop infrastructure across 150 countries to facilitate trade with China. This is not the first point at which AnchorX has collaborated with Conflux. Back in February, the company received in-principle approval from the Astana Financial Services Authority (AFSA) in Kazakhstan to issue CNH-pegged stablecoins. Growing bilateral trade between Kazakhstan and China was cited as the rationale behind the license, given the need for cross-border payments. At the time, it was outlined that the AxCNH yuan-pegged stablecoin would be issued on the Conflux blockchain. It’s unclear if this same stablecoin is the focus of this latest development or whether an entirely new yuan-pegged stablecoin will be issued.AnchorX collaborated with Conflux in 2024 to bring about the issuance of AxHKD, a Hong Kong dollar-pegged stablecoin. The stablecoin runs on the Conflux blockchain, with the stablecoin issuer using OKLink Trust as its custodian. TokenPocket, a multi-chain crypto wallet project, also outlined on X on July 21 that it too is involved in the partnership with Conflux and AnchorX. The project outlined that it will support the growth of stablecoin adoption, the development of cross-border payment solutions and the promotion of tokenized RWAs in international markets through the collaboration.  Pilot projectsTokenPocket went on to explain that the companies plan to launch pilot projects in Central Asia, Southeast Asia and other regions, building “a compliant, secure, and innovative fintech framework to boost the role of the Conflux ecosystem as critical infrastructure for cross-border trade.” It was revealed at the conference that the mainnet release of Conflux 3.0 will occur in August. With the implementation of further optimized execution modules, the project expects 3.0 to result in a network throughput of 15,000 transactions per second (TPS).  These developments over the course of the weekend have had an impact on the unit price of Conflux’s native token, CFX. On July 19, the token was trading at around $0.1043. According to CoinMarketCap data, at the time of writing, it’s trading at $0.2232, a 2.58% increase over the past day. 

Tongli Han, the CEO and CIO of Harvest Global, has expressed openness to the possibility of applying to offer Bitcoin and Ether exchange-traded funds (ETFs) to mainland Chinese investors through the Stock Connect program. This consideration is contingent on favorable developments in the next two years. Harvest Global, along with China Asset Management (ChinaAMC) and Bosera HashKey, recently launched Asia's first spot Bitcoin and Ether ETFs on the Hong Kong Stock Exchange, aligning with Hong Kong's ambition to establish itself as a global cryptocurrency hub. Han's remarks were delivered during the Bitcoin Asia conference in Hong Kong, underscoring the potential for expansion into the mainland Chinese market.Photo by Jimmy Chan on PexelsUncertain regulatory landscape and growth prospectsDespite the introduction of spot crypto ETFs in Hong Kong, uncertainty looms over mainland Chinese investors' access to such products through the Stock Connect program. China's regulatory stance towards the cryptocurrency industry remains stringent, with most commercial crypto activities prohibited on the mainland. While there is speculation regarding the potential inclusion of crypto ETFs in the eligible securities list of the Stock Connect program, approval remains uncertain. The debut of Hong Kong's spot crypto ETFs recorded modest trading volumes compared to their U.S. counterparts, signaling a cautious start. However, Han anticipates the potential for growth in the Asia region, envisioning the Hong Kong ETFs to potentially double the size of their U.S. counterparts. Despite differing opinions on growth prospects, market observers highlight challenges such as the relatively small size of the Hong Kong ETF market and restrictions on mainland Chinese investors' participation, underscoring the complexities facing the expansion of crypto ETFs in the region. 

Local crypto firms in Hong Kong are understood to be in “active” talks with the Securities and Futures Commission (SFC), with a view towards bringing about the integration of staking within crypto exchange-traded fund (ETF) products. Haiyang Ru, chief risk officer of HashKey Group, a leading Hong Kong-headquartered digital asset financial services firm, told The Block that the Chinese autonomous territory may shortly see the introduction of staking services relative to crypto derivatives trading products and crypto ETFs. He stated: "We are actively discussing with the SFC the introduction of ETF staking and tokenized money market funds, as well as launching an 'Earn' feature alongside spot trading."Photo by tommao wang on UnsplashFocus on staking in 2025HashKey is one of a number of well-known digital asset firms that is in regular contact with the regulator. Other firms are also paying attention to developments. Alessio Quaglini, co-founder and CEO of Hex Trust, a Hong Kong-based firm that offers regulated institutional digital asset custody and staking services, believes that staking will garner greater attention in 2025. He stated: “Institutions that move into crypto custody will naturally seek yield-generating opportunities for their clients."  OSL, one of the first entities alongside HashKey to be awarded digital assets-related licensing in Hong Kong, has also identified rising customer demand for yield-generating products in the crypto space within the Chinese autonomous territory.  Global competitionThe authorities in Hong Kong are likely to be watching developments overseas also. ETH ETFs in the United States have reeled in $3 billion in capital inflows without staking. Since the launch of these products, many industry commentators have suggested that in the event that staking is approved, big institutions, particularly pension funds and wealth managers, are going to be attracted to the passive yields on these ETFs.  Traditional finance (TradFi) loves yield, and in the case of Ether ETFs that include staking, an annual percentage yield (APY) of up to 5% should be possible. Last month, an S&P Global report suggested that there was growing interest from institutional investors with regard to crypto staking opportunities.  Cryptocurrency ETF issuer 21Shares has applied to the Securities and Exchange Commission (SEC) in the U.S. to include staking within its ETH ETF product. A similar application has been made by crypto asset manager Grayscale relative to its ETH ETF offering. With that activity ongoing in the U.S. and inter-jurisdictional competition in terms of digital asset growth opportunities, it’s likely that Hong Kong will be keen to enable this market offering. Staking ‘unparalleled’ in TradFi markets Earlier this week, the SFC introduced a new roadmap geared towards strengthening the digital assets sector in Hong Kong. One of the initiatives itemized is the enabling of crypto staking.  The explanatory document published by the regulator states that it is examining the introduction of staking with safeguards in respect to digital asset custody, liquidity risks and “ensuring that the operational processes for staking are transparent.” The SFC described crypto staking as a yield generation opportunity that is unparalleled in TradFi markets.