Ant Group Restructuring With Implications for Blockchain

Sumitomo Mitsui Financial Group (SMFG), a leading Japanese multinational financial services corporation and holding company, has outlined plans to launch a stablecoin.Photo by JJ Ying on UnsplashIn a press release published on its website on April 2, the company outlined details of a memorandum of understanding (MOU) it has signed with a view towards initiating discussions on the commercial use of stablecoins. Among the parties that have signed the MOU is Sumitomo Mitsui Banking Corporation (SMBC), Japan’s second-largest bank and a core unit of SMFG’s overall business. Other parties include local IT firm TIS, Inc., digital asset infrastructure firm Fireblocks and Ava Labs, the creator and developer behind the Avalanche layer-1 blockchain. Developing a framework for stablecoin issuanceThe agreement will see these stakeholders collaborate in an effort “to develop a framework for stablecoin issuance and circulation, including exploring key technical, regulatory, and market infrastructure requirements both in Japan and further afield.” The initiative will seek to examine a number of stablecoin use cases that SMFG believes can best leverage the characteristics of stablecoins. These include “a settlement method for tokenized financial and real-world assets (RWAs), such as government and corporate bonds, as well as real estate.” The company acknowledged that the tokenization of RWAs has been growing rapidly, with stablecoins emerging as an important settlement tool. It also acknowledged their growing use in the areas of international remittances, corporate payments and small-value, high-frequency transactions. SMBC sees potential in the use of stablecoins to reduce reliance on intermediaries where cross-border payments are concerned, improving upon traditional finance which relies on use of the SWIFT financial messaging network. It has identified savings that can be made in terms of the time taken to effect cross-border transactions and associated costs. According to a report published by Japanese financial news outlet Nikkei on April 1, Ava Labs is expected to use its know-how in order to construct the foundational basis for the stablecoin.  Meanwhile, Fireblocks will be responsible for the development of a management system for any stablecoin token that is subsequently issued as a consequence of the initiative. It will also get involved with the development of system security in relation to the project. The bank will work with TIS to support the developmental phase of the project. While the initiative is currently at the planning stage, trials are scheduled to begin during the second half of this year.If all goes to plan and work proceeds as per the schedule that has been established, a stablecoin could potentially be issued as a consequence sometime in 2026. It’s not the first time that SMBC has delved into consideration of stablecoins. Last September, it joined with Mitsubishi UFJ Financial Group (MUFG) and Mizuho to launch Project Pax, a cross-border stablecoin transfer platform. That initiative relies upon Progmat, a distributed ledger technology (DLT) platform founded by MUFG for the purpose of tokenization and the issuance of stablecoins. Japanese legislators have been working towards adding an amendment to the Payment Services Act, with some changes proposed relative to stablecoins. The changes would permit greater diversity in terms of stablecoin reserves. 

MaskEX Gets Initial Regulatory Approval in UAEThe online cryptocurrency trading platform and wallet provider, MaskEX has been given initial regulatory approval by a regulator in the United Arab Emirates (UAE).Photo by Carlos Alberto Gómez Iñiguez on UnsplashThe trading platform received outline approval from the Virtual Assets Regulatory Authority (VARA) in Dubai, where the company is headquartered. While the business has been around since 2021, this first compliance step is significant as it seeks to build and extend its footprint within the UAE and the broader Middle East and North Africa (MENA) region.Regulatory significanceTo say that regulation has lagged the development of crypto assets on a global basis is an understatement. However, the high profile and spectacular crypto business failures in 2022 have really captured the attention of regulators and lawmakers. Many point to inadequate regulation as a key cause of those failures. With that, most regulators recognize that it won’t be acceptable to the broader public to have such a loss impact on ordinary investors in a rerun of the collapses of 2022.VARA has been one of the most proactive regulators in that respect. The Authority has developed a regulatory framework, culminating in its current licensing regimen for crypto businesses. It wouldn’t have been feasible for MaskEX to trade without obtaining regulatory approval.Regulatory actionIn February, VARA issued Open Exchange (OPNX), a platform that specializes in the trading of crypto bankruptcy claims, with a cease and desist order, relative to the establishment of that business in Dubai. Last month, the Regulatory Authority issued an investor alert related to OPNX, warning the investing public that OPNX was not regulated by them and that investing in or using the platform was risky.That culminated with VARA sending OPNXs founders and CEO a formal warning letter. With that sort of action playing out, it’s no surprise that MaskEX has tried to go the compliant route, acquiring that initial approval.The firm is not alone in taking that approach. On May 1, BitOasis, another crypto trading platform headquartered in Dubai, became the first entity to be awarded a broker-dealer license.This milestone event for MaskEX means that it can now complete entity formation, expand its team, secure banking services and generally, open for business. In its application MaskEX requested permission to engage in the activity of acting as an exchange, offer borrowing and lending services, as well as to act as a broker and crypto asset manager.Crypto market to be driven by ME and Central AsiaOn social media on Thursday, MaskEXs VP and Chief Strategy Officer (CSO) Ben Caselin, said that the initial approval forms part of the firm’s application for a Full Market Product (FMP) license. Caselin used the opportunity to post a video offering a sneak peek at the firm’s new Dubai offices. “MaskEX will be the first crypto exchange to publicly disclose their headquarters and even allow the general public to visit,” he said.Speaking at Finoverse Arabia this week, Caselin also said that “the next crypto bull market is once again going to be driven by Asia, and the unsurprising surprise will come from the Middle East and Central Asia.” That’s a prediction that’s being floated by quite a number of industry commentators, and with the US shooting itself in the foot in its approach to digital assets, it sounds like a reasonable prediction.

Emurgo Looks to Fill in Missing Cardano Ecosystem ComponentsEmurgo, the Singapore-based commercial arm and a founding entity of the Cardano blockchain network, plans on working towards filling in the gaps relative to needed Cardano ecosystem components.So said Emurgo Founder and CEO Ken Kodama, in a recent discussion with Andrew Fenton, the Editor of Cointelegraph’s magazine. Emurgo is one of the three entities governing Cardano and has taken on the task of addressing what it perceives as “missing” components in the Cardano blockchain when compared to other leading blockchains.Photo by Traxer on UnsplashAddressing 21 categoriesKodama outlined a strategic shift in Emurgo’s approach, describing it as a transition to a venture studio model to address 21 specific categories that he and his team believe require attention. According to Kodama, the solutions to these gaps will either be built by Emurgo themselves or sourced through investments, hackathons, or grants to incentivize developers within the Cardano community. Kodama stated: “So, that’s what we need to focus on, shifting from where we are today into a venture studio model.”One area that the Emurgo CEO is looking to address is the need to introduce layer 2 solutions to enhance Cardano’s scalability. While other blockchains have seen significant development in this area, Kodama feels that Cardano needs to catch up. Therefore, it’s a priority for Emurgo to cultivate a similar environment within the Cardano network.Along those lines, Emurgo is exploring zero-knowledge rollups and optimistic rollups, indicating the firm’s commitment to exploring and investing in what is the latest cutting-edge blockchain technology. To this end, they’ve already organized hackathons centered around these themes.Developer proficiency issueThe Emurgo boss feels that one of these 21 shortfalls is more pressing than the rest. Kodama acknowledged that the barrier of having developers proficient in more obscure programming languages like Haskell and Plutus is a difficulty. He believes the current pool of developers with expertise in these languages is insufficient. To address this, Emurgo is keen to promote Aiken, a toolkit and a new programming language designed to facilitate the development of smart contracts on the Cardano blockchain.Another one of the highlighted gaps is the absence of a robust decentralized identity (DID) system for enterprise adoption within the Cardano ecosystem. Kodama voiced his concern in this respect, stating: “We don’t see that much DID application being built on Cardano. So, that’s the first gap, or primary gap that we need to fill in.”“Aiken and other programming language applicability are quite important to broaden the number of builders able to build on top of Cardano. We have been educating builders to code in Haskell and Plutus. We had more than 2,000 graduates. However, that’s not really enough,” Kodama added.Emurgo has high hopes for Aiken and similar programming languages that can be integrated into Cardano, with the aim of diversifying the pool of developers capable of creating smart contracts on the platform, using a variety of programming languages.