UAE Royal Office to Visit South Korea Next Month for Web3 Ventures

Bybit Extends UAE Tendrils via Blockchain ScholarshipDubai-headquartered crypto spot and derivatives trading platform Bybit, the third most popular cryptocurrency exchange globally, has announced a new partnership with the American University of Sharjah (AUS) as part of its ongoing commitment to promote crypto adoption in the United Arab Emirates (UAE).The collaboration was solidified through the signing of a Memorandum of Understanding in Sharjah, the UAE's third largest city. As a testament to this partnership, Bybit has contributed AED 1,000,000 ($272,000) to establish a scholarship fund, facilitating the academic and research endeavors of 20 students pursuing fintech and blockchain studies at AUS. Eligible students enrolled in computer science and computer engineering programs will be able to benefit from the Bybit Scholarship starting from the upcoming fall semester.Photo by Ainur Kamaev on UnsplashHackathon sponsorshipIn addition to the scholarship initiative, Bybit is dedicated to broader industry endeavors and will contribute an extra AED 100,000 ($27,200) to sponsor a hackathon for the UAE blockchain community. The inaugural AUS-Bybit Inter-College Hackathon is scheduled to take place during the 2023–2024 academic year at the AUS College of Engineering.The UAE has recognized the significant role of cryptocurrencies in its trade activities, and the thriving crypto and blockchain industry in the country serves as a testament to the government’s visionary approach. Dubai alone is home to more than 772 crypto companies, solidifying the UAE’s position as a hub for digital asset innovation. Consequently, the demand for blockchain talent is expected to rise in the region.Industry partnershipsDr. Susan Mumm, Chancellor of AUS, emphasized the university’s commitment to excellence in education, attributing its reputation to strong industry partnerships that bridge the gap between academia and the corporate world. Through the collaboration with Bybit, AUS students will gain access to the technical knowledge necessary to stay abreast of the latest developments in the crypto and blockchain industry.The establishment of the Bybit Scholarship further supports students’ education and skill enhancement. Dr. Mumm expressed the university’s goal of producing professionals and lifelong learners who can make a positive impact in a rapidly evolving world.Ben Zhou, co-founder and CEO of Bybit, highlighted the pivotal role of younger generations in propelling the blockchain revolution forward. Zhou expressed his pleasure in establishing the Bybit Scholarship at AUS, enabling talented students to future-proof their knowledge and skills. He extended his gratitude to AUS for providing opportunities to raise awareness about cryptocurrencies and sharing first-hand industry insights with students from one of the most esteemed universities in the region. Zhou eagerly anticipated being inspired by future engineers, blockchain scientists, and Web3 startup founders.Bybit, a prominent player in the crypto space, unveiled its Dubai headquarters in April, solidifying its commitment to the region and its aspiration to contribute to the growth of the digital asset ecosystem. In May the company gained outline approval to operate in Kazakhstan. Demonstrating further progress still, last month the firm confirmed that it was extending its service offering to include crypto lending.

LDP Working Group Proposes Web3 Industry Plan to Japan’s Prime MinisterJapan’s ruling Liberal Democratic Party (LDP) announced that its Working Group for Digital Society Promotion presented a proposal related to the Web3 industry to Prime Minister Kishida Fumio on Tuesday. The information was made public on the party’s website and later reported by the Korean crypto media outlet Tokenpost.Photo by Jezael Melgoza on UnsplashImproved crypto regulationsThe comprehensive 35-page study favorably reviewed the enhanced cryptocurrency regulations implemented by the Japanese government following the 2014 Mt. Gox breach and the 2018 Coincheck hack. The study credits these improved regulations for nurturing Japan’s robust Web3 ecosystem, which received global attention amidst the recent crypto winter. This term refers to a period marked by a sustained downturn in cryptocurrency values.Japanese crypto exchanges demonstrated prudence by refraining from listing most of the problematic tokens on their platforms, thereby averting panic within the market. This cautious approach was supported by Japanese law, which mandates crypto exchanges to securely store customers’ staked tokens separately. As a result, they were shielded from the repercussions of the FTX bankruptcy, which arose due to a liquidity crisis of FTT, the global crypto exchange’s native token.Significance of security tokensThe paper optimistically projected that Japan could lead the way in passing through the crypto winter ahead of other countries, citing the nation’s track record of overcoming numerous challenges in the industry. The authors highlighted the exit of speculative projects from the sector, balanced by the rise and continuous growth of new blockchain-based businesses. The report underscored the significance of tradable security tokens, which leverage blockchain technology to represent assets or rights.The adaptable nature of blockchain technology was emphasized, particularly its potential to incentivize social activities like volunteering. This versatility enables the broader public to actively participate in monitoring and addressing issues related to deteriorating infrastructure, thereby reducing associated management costs across society.Crypto taxationThe proposal also addressed the issue of crypto taxation, arguing for enhancements to the token investment environment to bolster blockchain-driven businesses. Currently, Japan taxes tokens held by corporations, discouraging domestic investment and stifling the growth of the Japanese Web3 ecosystem. To rectify this, the paper suggested exempting tokens issued by a third party from taxation if they are not intended for short-term trading.Moreover, the authors addressed the high taxation rates facing retail investors in Japan, which can reach up to 55% on income from crypto trading. This stricter tax regime compared to other countries has led many taxpayers to seek investment opportunities abroad. The authors suggested improvements to create a more investor-friendly environment.Token listing procedureThe proposal also included recommendations concerning token listings. In Japan, crypto exchanges are currently obligated to undergo a preliminary review conducted by the Japan Virtual and Crypto Assets Exchange Association (JVCEA) before listing tokens. It was suggested that the review process should be further refined to enhance efficiency.Yen stablecoinsThe authors emphasized the importance of introducing and circulating yen stablecoins to foster the growth of the Japanese Web3 industry, necessitating the development of a sustainable business model for these stablecoins.Content & Web3Furthermore, the proposal underscored the need for clear guidelines to discourage gambling behaviors and promote responsible usage within the NFT space. It advocated for the establishment of an industry organization bridging the content industry and the Web3 industry, which would facilitate collaboration and collective efforts towards a robust NFT ecosystem in Japan. Measures to protect Japanese content and data from unauthorized monetization by foreign entities were also recommended.According to an industry official who spoke with Tokenpost, Japan’s extensive preparations for the Web3 initiative have instilled confidence in the sector. The official highlighted that the country is currently exploring ways to establish connections between these new projects and existing industries, with the goal of maximizing their economic potential and generating fruitful outcomes.

Bank of Japan Publishes Results of CBDC PoCThe Bank of Japan (BoJ) recently concluded the second phase of its central bank digital currency (CBDC) proof of concept (PoC) project, which began in April. The results of this phase were published on Monday, and they shed light on key aspects such as the comparison between account-based and token-based CBDCs and the management of holding limits for users with multiple accounts.Photo by Manuel Cosentino on UnsplashToken-based CBDCsThe experiments conducted by the central bank covered a wide range of topics. Among the most intriguing findings were the advantages and disadvantages of token-based CBDCs and how to effectively impose holding limits for users with multiple CBDC balances.Token-based CBDCs have garnered interest from various central banks, with some adopting the UTXO token model used by Bitcoin without the use of a distributed ledger. A UTXO or unspent transaction output, defines where a blockchain transaction starts and finishes. The Bank of Japan explored this model and analyzed its pros and cons.In the initial proof of concept, both account-based and token-based CBDCs were examined, considering scenarios where the central bank managed the ledger or shared it with intermediaries like banks. In the token-based model, fixed token denominations were used, similar to physical cash in countries like India, and a centralized ledger was employed. However, in the recent phase, the central bank utilized flexible value tokens similar to UTXO and shared ledger functions with intermediaries.The Bank of Japan favored the flexible value token model due to its ability to handle multiple requests simultaneously. However, it acknowledged that this model may require more technical resources compared to the account-based approach. Challenges may arise when implementing additional functions, such as holding limits, while maintaining optimal performance. The European Central Bank (ECB) also noted in a recent report that most payment providers are accustomed to account-based payments and would incur costs to adapt to token-based systems.Another significant aspect explored by the BoJ was how to impose holding limits when users have multiple CBDC balances through different intermediaries. The challenge lies in determining if the overall holding limit has been breached without compromising user privacy.Homomorphic encryptionOne possible solution discussed in the report is the use of homomorphic encryption, which enables computations to be performed on encrypted data without it first needing to be decrypted. That allows for the necessary checks without intermediaries accessing the specific data being checked. Although this solution may slightly increase processing time, it could introduce a higher risk of data inconsistencies.Alternatively, a simpler approach proposed by the central bank is to establish a per-account holding limit and a limit on the number of accounts a single user can hold, rather than imposing global limits. Ideally, users with multiple accounts would have a higher per-account holding limit compared to those with fewer accounts.Phase 3 underwayWith the next pilot phase already underway, the BoJ aims to test the end-to-end process flow and identify challenges related to integrating with external systems. Additionally, they are creating a CBDC Forum to gather input from the private sector, ensuring a collaborative approach to CBDC development.While investigation and research into CBDCs continues, the BoJ has said that it will make a final decision on CBDC implementation by 2026.