Japanese Crypto Exchange Zaif Adds KLAY/JPY and KLAY/BTC Trading Pairs

Hong Kong and Israel Collaborate to Expand CBDC Access Beyond BanksIn a collaborative effort, the Hong Kong Monetary Authority (HKMA), the Bank of Israel (BoI), and the Bank of International Settlements (BIS) Innovation Hub have jointly released a comprehensive report on Project Sela, a central bank digital currency (CBDC) initiative.Photo by POURIA 🦋 on UnsplashBroadening the role of intermediariesThe report was published to the BIS website on Tuesday. In keeping with the trend of many CBDC projects, Project Sela is characterized by a robust public-private partnership. However, its particular focus lies in broadening the spectrum of intermediaries, aiming to offer retail CBDC services through a more diverse array of service providers, thereby reducing dependency on traditional banks and major payment providers.Andrew Abir, Deputy Governor of the Bank of Israel, emphasized the importance of fostering a dynamic and open ecosystem with a wide variety of service providers. He stated:“Competition and innovation require a flourishing and open ecosystem with many different types of service providers. This was our initial goal in Project Sela as a proof-of-concept, and the project proved the feasibility of the model we had in mind.”Involving retail banksIn a previous model explored through Hong Kong’s Project Aurum, retail banks were entrusted with customer-facing tasks while maintaining the central bank’s operation of the wholesale ledger for the eHKD. In contrast, Project Sela introduces a novel approach where the central bank operates the retail ledger — a model akin to Israel’s digital shekel.The primary actors in Project Sela, known as Access Enablers (AEs), notably do not have control over CBDC balances, distinguishing them from conventional payment providers. Moreover, AEs are not required to maintain liquidity to support CBDC services. Their role encompasses facilitating user onboarding and CBDC access, fulfilling know-your-customer (KYC) and compliance obligations, and routing payments. The role of banks and other “funding institutions” primarily revolves around enabling the conversion of cash and deposits into CBDC.The rationale behind this approach is rooted in the emergence of technological advancements in open banking and DeFi, which have demonstrated the potential to disentangle financial services by granting users greater access to their financial data and control over their own funds.Enabling participation among the unbankedProject Sela envisions the unbanked population utilizing ATMs to convert cash into CBDC. A similar approach has recently been taken by the Chinese authorities. In the resort city of Sanya, authorities have introduced e-CNY ATMs in order to enable e-CNY access for foreign tourists.However, it is noteworthy that in many countries, the primary function of ATMs is to dispense cash rather than accept it. Consequently, the inclusion of AEs could pose challenges to traditional banking institutions, as CBDC adoption could potentially impact bank deposits.Privacy and cybersecurity considerations are implicated within Project Sela. As the central bank operates the retail ledger, ensuring the confidentiality of personal information becomes imperative. To safeguard privacy, AEs employ a hashing mechanism to obfuscate personal identifiers, although the report does not delve into the subject in detail.While Bank of Israel Governor Amir Yaron admitted that a CBDC can never be anonymous, he claimed that “if we choose to issue a digital cash shekel, it will provide at least as much privacy as other digital means of payment.”

Monex Group, a well-known securities broker in Japan’s financial services sector, is delving further into the digital currency space through the acquisition of a majority stake in 3iQ Digital Holdings, a Canadian crypto asset management company. Whilst the acquisition was announced via a joint press release on Thursday, the specific details of the deal were not disclosed.Photo by sebastiaan stam on UnsplashAchieving growth through cryptoYuko Seimei, the CEO of Monex Group, emphasized the long-term strategy of strengthening their asset management business. By incorporating 3iQ into their portfolio, the aim is to achieve substantial growth by catering to the evolving crypto asset management needs of institutional investors and crypto exchanges globally. Monex Group is already a key player in the Japanese crypto landscape, owning the Coincheck exchange. Coincheck is one of the largest cryptocurrency exchanges in Japan. It has regained market dominance after a cyber attack resulting in the theft of $534 million in digital assets in 2018. Monex collaborated with Japanese telecommunications firm NTT DOCOMO in October, forming Monex Securities as a holding company containing Coincheck, while selling NTT DOCOMO a 49% stake. ETF focusThe acquisition of 3iQ marks Monex’s strategic move to extend its exposure to the North American crypto industry. This adds to the conglomerate’s existing presence in the United States through the ownership and operation of TradeStation, an American brokerage firm. 3iQ, operating under a Canadian license, has come to prominence in the crypto-sphere for launching two exchange-traded funds (ETFs) in Canada. Notably, it introduced Bitcoin and Ethereum ETFs on the Toronto Stock Exchange, showcasing innovation in a region where regulatory approval is awaited by U.S.-based companies. Spot bitcoin ETFs have been hotly tipped to offer the next form of crypto adoption, potentially facilitating the in-flow of massive amounts of money currently within the domain of traditional finance. While the focus has been largely on the United States in that regard, other centers such as Hong Kong are similarly gearing up towards offering spot ETF crypto products to both institutions and retail investors. Amid that background, this acquisition by Monex didn’t go unnoticed by ETF sector professionals. Bloomberg Intelligence ETF Research Analyst James Seyffart took to social media platform X on Thursday to draw attention to the deal. Frederick Pye, the Chairman and CEO of 3iQ, expressed enthusiasm about joining forces with Monex Group. With Monex already owning Coincheck, a crypto exchange powerhouse in Japan, Pye highlighted the potential synergy. The collaboration is seen as an opportunity to enhance Coincheck’s offerings, particularly for institutional investors. Pye characterized the partnership as a groundbreaking collaboration that promises to reshape the crypto industry. Monex’s acquisition of 3iQ is aligned with its broader vision of being a key player in the global crypto asset management landscape. The move not only expands their reach into North America but also positions them to capitalize on the growing demands of institutional investors in the evolving digital currency market.

Hong Kong Broadens Pilot Program for China’s Digital YuanA senior Hong Kong official announced last week that the Chinese autonomous territory plans to expand its pilot program of the e-CNY, China’s digital yuan, to include additional banks and payment platforms.Photo by Chi Lok TSANG on UnsplashDriving cross-border payment efficiencyThe e-CNY project is China’s ambitious endeavor to bring a digital counterpart to its national currency, the yuan, into mass market, everyday use. The primary objectives of this latest initiative are to enhance the efficiency and convenience of cross-border payments and to bolster greater use of the digital yuan on an international basis.Given Hong Kong’s status as a special administrative region of China and bearing in mind that it is a global financial hub, its role in the e-CNY project is likely to be of paramount importance to the Chinese administration.Hong Kong has been actively involved in the e-CNY project for some time. Previously, the local regulator, the Hong Kong Monetary Authority (HKMA), and the People’s Bank of China (PBOC) jointly explored and tested e-CNY’s feasibility and interoperability in cross-border scenarios.Ongoing collaborationOver the years, these two authorities have conducted numerous technical trials to assess the practicality of implementing the e-CNY. The PBOC initiated e-CNY testing in mainland cities in 2019, followed by cross-border trials involving Hong Kong and Macau. Collaboration between Hong Kong and the mainland relative to the digital yuan was initiated in December 2020 when a pilot program was launched.That program enabled Hong Kong residents to utilize e-CNY wallets for purchases at specified merchants in Shenzhen, aligning at the same time with a separate initiative, the objective of which is to achieve closer economic and social integration between Hong Kong, Macau, and nine cities in Guangdong province.Hong Kong and Mainland China had also partnered on technical testing in 2021 aimed at evaluating the technical feasibility, operational efficiency, regulatory implications, and legal considerations of employing the e-CNY for cross-border trade settlement between the two areas. That testing program is likely to be providing valuable insights, which Chinese authorities can use to expand the e-CNY’s scope and use cases relative to cross-border transactions.Completion of initial testing phaseHong Kong recently successfully concluded the first phase of its e-CNY trial, featuring local banks and the Hong Kong Monetary Authority (HKMA). This phase primarily focused on assessing the technical feasibility of employing the e-CNY for cross-border payments between Hong Kong residents and mainland merchants.What Christopher Hui, Secretary for Hong Kong’s Financial Services and the Treasury, was referring to last week at a fintech event, is effectively the second phase of that overall trial program. This upcoming phase will involve a broader array of banks, payment service providers, and use cases, expanding the scope of e-CNY testing.Taking this latest development into account from the point of view of e-CNY development by the Chinese government, it’s patently obvious from the myriad of initiatives that keep coming week after week that the Chinese authorities are determined to drive the e-CNY towards ever greater real-world use.