Indonesia Embraces XRP, ADA as Tradable Crypto Assets

Huobi Expands Crypto Trading Services in Hong KongHuobi, the Seychelles-headquartered prominent cryptocurrency exchange, is making strides in Hong Kong as its local subsidiary, Huobi HK, now offers crypto trading services to clients in the region.Following its expressed intention to apply for a virtual asset exchange license from the Hong Kong Securities and Futures Commission (SFC), Huobi HK has commenced providing crypto spot trading and virtual asset custody in Hong Kong. In order to comply with regulatory and anti-money laundering (AML) requirements, the exchange will collaborate with independent auditors, as announced by Huobi HK on Twitter.Photo by Shubham Dhage on UnsplashCrypto business licensingThis move aligns with the broader trend of crypto firms shifting their focus toward the East, where regulatory environments are becoming increasingly accommodative. A spokesperson for Huobi stated in a prepared statement: “Regulation of Web3 in Hong Kong will contribute to the widespread adoption of cryptocurrencies on a global scale.”Hong Kong, a Special Administrative Region under Chinese governance, recently introduced a regulatory framework for crypto exchanges, which took effect on June 1. Under these new regulations, retail investors in Hong Kong will be able to trade cryptocurrencies on licensed platforms, removing previous restrictions that limited trading to investors with portfolios exceeding HK$8 million (approximately $1 million).The new regulations impose requirements on virtual asset trading platforms to implement “suitable” onboarding processes and disclosures. Additionally, tokens must meet “minimum criteria” to ensure that “retail investors should be less prone to market manipulation.”Crypto sector interestHong Kong’s inviting regulatory landscape has already piqued the interest of crypto firms. The Greater China division of WeWork, a coworking provider, reported receiving 40 to 50 applications and inquiries from crypto businesses seeking to establish a presence in Hong Kong in recent months.Justin Sun, Tron founder and Huobi global adviser, drew parallels between the developments in Hong Kong and Beijing in a tweet, stating, “It is indeed fascinating to witness the Beijing government’s recent focus on Web 3.0, particularly considering the imminent June 1st developments in Hong Kong.” Sun added that this represents “a significant step towards recognizing the transformative potential of decentralized systems and blockchain-based solutions.”Huobi is actively involved in the development of Hong Kong’s Web3 ecosystem. In addition to its cryptocurrency trading license application, the firm became a significant contributor to Hong Kong’s first Web3 ecosystem fund during this year’s Hong Kong Web3 Carnival.HK Virtual Assets ConsortiumIn a separate announcement, Huobi disclosed that it has become the first member of the Hong Kong Virtual Assets Consortium (HKVAC), an organization dedicated to providing credit ratings for crypto asset exchanges and trading products. HKVAC, a collaborative effort between crypto industry players, including exchanges, institutional investors, and Hong Kong-licensed rating agencies, aims to enhance the security risk management capabilities of the crypto industry and assist authorities in establishing Hong Kong as a regional hub for virtual assets and digital finance.As a founding member of HKVAC, Huobi will serve as a reference point for the organization, leveraging its expertise in security technology and its compliance-oriented, standardized processes.

Putin approves inclusion of digital ruble within Russian tax codeRussian President Vladimir Putin has given his approval to a new law that incorporates the digital ruble into Russia’s tax code, marking a significant step in the country’s push towards digital currency adoption.Photo by Egor Filin on UnsplashAuthority to recover fundsThe development was reported by Russian news outlet Telesputnik on Tuesday. The legislation introduces terms such as “digital ruble” and “digital ruble wallet” into the tax code. It outlines the legal framework for these digital assets. Notably, the law grants bailiffs and court-appointed individuals the authority to recover central bank digital currency (CBDC) funds from wallets in cases where taxpayers lack sufficient fiat in their bank accounts.Moreover, the law empowers tax authorities to suspend transactions on digital ruble wallets and request documentation from platform operators to confirm fund withdrawals from a taxpayer’s account. In a move aimed at streamlining the process, confiscated digital coins can be transferred directly to the Russian Treasury.This legislation, the second major CBDC-related law passed in 2023, signals Russia’s interest in fast-tracking the implementation of its digital ruble. Despite conflicting statements, the Ministry of Finance anticipates that all Russians will have the opportunity to use digital ruble wallets for payments by 2024. However, the Central Bank has indicated a potentially delayed national roll-out, stating it may not occur before 2025.Key provisions outlined in the new law include defining the Central Bank’s role as the “operator of the digital ruble platform” and establishing liability procedures if the bank fails to fulfill these obligations. Additionally, the law addresses the taxation of transactions involving digital rubles, with exemptions for Value Added Tax (VAT) on account opening and holding.Working around sanctionsAs Russia edges closer to the digital ruble roll-out, the nation faces economic challenges due to ongoing U.S. and EU sanctions. Moscow views the CBDC as a strategic tool in international trade, aiming to leverage it to navigate economic restrictions. Government officials believe the digital ruble will play a crucial role in reducing costs and risks for domestic firms engaged in foreign trade.The Eurasian Economic Union (EAEU), a five-member economic bloc including Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan, is exploring the potential for cross-border CBDC functions. Belarus and Kazakhstan are also expediting their CBDC projects, with a focus on cross-border trading capabilities.Earlier this month, a Russian politician could begin to use their respective CBDCs for bilateral trade deals as early as next year. Even before sanctions hit, both Russia and China had been working towards de-dollarization for some time.Ongoing pilot programThe Central Bank is actively piloting the digital ruble in 11 Russian cities alongside 13 partner commercial banks. Earlier this month, the bank stated that “the pilot will continue at least until the end of 2024 and, if necessary, will be extended.” The Central Bank added that “only after the completion of the pilot will the digital ruble be introduced into mass circulation.”A group of 16 banks is set to join the trial in the coming year. The finance ministry aims to utilize the digital ruble for government subsidies and welfare payments, with plans for implementation in 2024.

Seoul Auction Blue seeks to register security tokens with the FSS for Andy Warhol’s artworkSeoul Auction Blue, the operator of fractional artwork investment platform Sotwo, recently submitted an application to the South Korean Financial Supervisory Service (FSS), local news outlet Seoul Economic Daily reported on Wednesday (local time). Its aim is to register security tokens linked to artworks with the financial authority, marking it the third entity in the country to pursue this innovative financial venture.Photo by Guido Coppa on UnsplashAndy Warhol’s ‘Dollar Sign’The artwork investment app plans to issue security tokens based on Andy Warhol’s “Dollar Sign,” a piece measuring 51.0 cm in height and 40.5 cm in length. This artwork was purchased by Seoul Auction Blue at an auction for KRW 626.2 million (approximately $485,000). The total value of the security tokens, inclusive of issuance costs, is approximately KRW 700 million. The firm will issue a total of 7,000 tokens, each valued at KRW 100,000. Upon receiving regulatory approval, Seoul Auction Blue is set to open for subscription requests from Dec. 20 to 26.In its endeavor to issue digital investment contract securities, Seoul Auction Blue has meticulously prepared its documentation in line with the FSS’s guidelines. The selection of the artwork of Andy Warhol, the renowned and iconic 20th-century artist, aligns with the FSS’s recommendation to choose a significant piece by an internationally acclaimed artist. This strategic choice reflects the company’s commitment to compliance and the recognition of Warhol’s global stature in the art world.Preventing conflicts of interestThe registration application submitted by Seoul Auction Blue includes specific restrictions aimed at preventing conflicts of interest with its affiliates related to security tokens. As per these rules, the company is barred from buying idle assets of affiliates to back its security tokens. Instead, Seoul Auction Blue is permitted to acquire them only through public methods like participating in an open bid or a post-sale bid process. Notably, the token issuer is in principle prohibited from purchasing these assets via intermediaries in private sales or any other non-transparent settings.The acquisition of underlying assets requires approval from the compliance monitoring committee. Furthermore, this regulation strips Seoul Auction Blue of the capacity to determine the final trading prices or conditions for these transactions.In addition, the company is collaborating with a couple of securities firms to safeguard investors’ funds, creating a buffer against any potential bankruptcy of the issuer. The funds raised from subscriptions for the security tokens will be managed in accounts overseen by KB Securities. Additionally, an investor protection fund is being set up, which will be handled as a trust fund by Shinhan Securities. This fund acts as an extra layer of security, offering investors enhanced protection for their investments.