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Hong Kong Urged to Issue HKD StablecoinA new policy proposal is urging the Hong Kong government to take a bold step by issuing its own stablecoin, HKDG, pegged to the Hong Kong dollar. The aim is to compete with established stablecoins like USDT and USDC, according to a paper co-authored by notable experts in the field.The proposal, co-authored by Wang Yang, Vice Chancellor of the Hong Kong University of Science and Technology and Chief Scientific Advisor of the Hong Kong Web3 Association, angel investor Cai Wensheng, BlockCity founder Lei Zhibin, and Ph.D. student Wen Yizhou, stresses the significance of stablecoins as a link between traditional finance and the digital economy.Photo by Chapman Chow on UnsplashHKD stablecoin benefitsThe authors believe that a Hong Kong Dollar-pegged stablecoin can enhance financial inclusiveness, improve transaction efficiency, reduce costs, strengthen payment systems, and boost Hong Kong’s fintech capabilities.The experts argue that the current plan of allowing private institutions to issue stablecoins is not ambitious enough and may result in limited market share. They draw a comparison with Singapore’s XSGD stablecoin, issued by Xfers, which only has a market cap of $65 million, compared to the combined market capitalization of over $110 billion for USDT and USDC. With Hong Kong’s foreign exchange reserves surpassing $430 billion as of March, an HKDG stablecoin backed by the government would offer higher credibility and lower risk.Private vs. public issuanceWhile the proposal acknowledges potential risks, such as legal and regulatory challenges, technical risks, and short-term exchange rate fluctuations, it argues that government-issued HKDG would bear lower risks compared to stablecoins issued by private institutions. The authors assert that HKDG would benefit from government regulation and the transparency provided by blockchain technology.Furthermore, the paper suggests that HKDG could aid in Hong Kong’s de-dollarization efforts and challenge the dominance of the US Dollar in the crypto ecosystem. It is believed that HKDG could provide additional liquidity for government investment projects, facilitate the digitization of traditional assets, foster financial innovation and competitiveness, and increase transparency.Recent months have seen Hong Kong demonstrate its intention to establish itself as a global hub for the crypto industry. To support this, a Web3 task force has been set up to cultivate a thriving ecosystem in the region.There has been plenty of activity of late relative to stablecoin development in Asia. At the end of May, Hong Kong-based qualified custodian and trust company First Digital Trust, announced plans to introduce a US dollar stablecoin, issued and regulated in Hong Kong. Last month it emerged that Japan’s largest bank, Mitsubishi UFJ Financial Group, Inc. (MUFG), is in discussions regarding the issuance of stablecoins on its blockchain network.Competing internationallyIssuing a government-backed stablecoin could be a transformative move for Hong Kong’s fintech landscape. By leveraging its substantial foreign exchange reserves and embracing blockchain technology, Hong Kong could create a stablecoin that not only competes with established players but also promotes financial inclusiveness and strengthens its position as a fintech leader.With the potential benefits appearing to outweigh the identified risks, it still remains to be seen whether the Hong Kong government will adopt this proposal and pave the way for an HKDG stablecoin in the near future.

Suspects emerge in Taiwan in ongoing JPEX scandal falloutIn the ongoing saga surrounding the collapse of Dubai-headquartered cryptocurrency exchange JPEX, Taiwanese prosecutors have identified new suspects, marking a significant development in the case.The Taipei District Prosecutors Office (TDPO) has requested the custody of Chang Tung-ying, chief partner at JPEX’s Taiwan office, over allegations of fraud. That’s according to a report by local TV channel TVBS News on Thursday.Photo by Ricky Zeng on UnsplashMoney laundering and Banking Act violationsThis latest development brings a new twist to the scandal, which has largely been playing out in the Chinese territory of Hong Kong. The TDPO reportedly conducted searches at nine locations linked to the JPEX investigation. Chang, along with three other individuals, including JPEX lecturer Shih Yu-sheng (also known as Shi Yu), was summoned by the authorities. Chang and Shih are being investigated for violations of the Banking Act and the Money Laundering Control Act.During the investigation, JPEX salespersons Liu Chien-fu and Niu Keng-sheng were released, with Liu being granted bail of 50,000 New Taiwan dollars ($1,550). Niu, the registered person in charge of JPEX Taiwan, was released after questioning.Celebrity promoter focusThe report also revealed that Nine Chen, a Taiwanese celebrity and singer who previously served as a brand ambassador for JPEX, was summoned by prosecutors. He has cooperated with law enforcement in the role of a witness to the alleged fraud who has testified to illicit activity carried out by the platform. However, it is now understood that recent events have developed such that Chen is now being treated as a defendant.This action resonates with actions taken by the authorities in Hong Kong some weeks ago in the earlier stages of investigation into this affair. In September, one of the first actions taken by Hong Kong law enforcement was the arrest and detention of social media influencer and former lawyer Joseph Lam, known to followers as “Jolamchok” on the Instagram platform.Alleged liquidity crisisJPEX, once a successful crypto exchange, abruptly halted some services in mid-September, citing a liquidity crisis triggered by alleged “unfair treatment” from institutions in Hong Kong. The sudden implosion led to accusations of misleading investors regarding the application for a crypto trading license and other issues.The scandal surrounding JPEX has escalated into a major industry concern, prompting investigations by Hong Kong authorities. Over 2,000 complaints from JPEX users, reporting losses of nearly $180 million, have triggered significant regulatory attention.As investigations progressed in Hong Kong, the authorities took the decision to block access to the platform, with the platform responding by advising customers to circumvent this restriction through the use of a virtual private network (VPN).As of September 25, law enforcement has arrested at least 11 alleged suspects in the JPEX case, while the alleged masterminds remain at large. At that time, Hong Kong’s Securities and Futures Commission (SFC) pledged to renew its efforts to combat unregulated crypto platforms in Hong Kong.A survey conducted by the Hong Kong University of Science and Technology (HKUST) business school has indicated that the affair has had a negative impact on public sentiment towards crypto more recently.

Taiwan’s Comma3 Ventures Raises $45M Crypto FundTaiwan-based Comma3 Ventures, a venture capital firm focused on Web3, has closed funding on a $45 million Web3 fund.The raise was achieved through the participation of a diverse range of institutional investors, high net worth individuals and family offices based in Taiwan and Singapore.In a press release published on Friday, the company stated that the funds raised will be allocated to blockchain infrastructure projects at an early stage of development, focusing on dApps, zero-knowledge proof technology, cross chain bridging projects, as well as layer one and layer two blockchain networks.Photo by Frolda on UnsplashSingapore tiesWhile Taiwan-based, the venture capital has strong ties with Singapore, given that Nicole Liu, one of the firm’s general partners, was formerly an investment manager with Jubilee Capital Management.Liu leads the firm alongside fellow general partners, Ivan Li and Denny Yang. Among the previous projects the trio have invested in are Zilliqa, a smart contract blockchain network that focuses on throughput and scalability, Ethereum layer two side-chain network Polygon, South Korean enterprise blockchain Klaytn, blockchain-based esport game producer Thetan Arena, and a project called Highstreet which seeks to re-imagine retail in the metaverse.Earlier this month, Cetus, a decentralized exchange (DEX) and concentrated liquidity protocol built on the Sui and Aptos blockchains, secured funding from Comma3 Ventures, alongside AC Capital, Adaverse, Animoca Brands, Coin98 Ventures, IDG Capital, KuCoin Ventures, Leland Ventures, NGC Ventures and OKX.Funding 80 to 100 Web3 start-upsAccording to Comma3 Ventures, crypto start-ups that have the potential to scale within the Web3 space within niches such as DeFi and GameFi, will be prioritized for funding. With a spend of $45 million at its disposal, the venture capital firm intends to target around eighty to one hundred start-ups, with a capital funding variance of between $250,000 to $1 million depending on the particular project.In a press release Liu stated: “We regard ourselves as an early-stage investor, so team background and previous experience are very important for us. And on the other hand, we are looking for entrepreneurs who really know what blockchain and Web3 are and how to rebuild their businesses empowered by decentralization technology and token economics. We are dedicating ourselves to investing in and supporting early-stage blockchain infrastructure such as L1&L2, cross-chain, and ZK, as well as DAPPs with the potential to bring traffic to Web3, such as DeFi, GameFi, and creator economies.”In a 2021 podcast, Ivan Li explained that his first allocations in the crypto space were to Bitcoin and Ethereum. Those successful investments were reinvested and allocated to blockchain, data analysis and cyber security projects. From 2021 onwards, Li explained that institutions in the TradFi space in Taipei started to approach him with an interest in trying to get exposure to crypto. That led to him forming Red Building Capital in 2018. Comma3 Ventures followed in 2022.