Tether Critics Point to Previous Chinese Securities Backing

The Monetary Authority of Singapore (MAS) is set to gain enhanced powers through the Financial Institutions (Miscellaneous Amendments) Bill 2024 (FIMA Bill), currently under consideration in the country's parliament.Photo by Kenneth Koh on UnsplashProfound impactIf the bill passes, it could have a profound impact on cryptocurrency firms operating in Singapore. One significant aspect of the proposed amendments is the expansion of MAS's authority to issue directives to capital markets services license (CMSL) holders involved in unregulated business activities. This move is particularly aimed at firms offering unregulated products that might pose contagion risks to their regulated operations. The bill cites examples such as bitcoin futures and payment token derivatives traded on overseas exchanges. At the moment, the regulator is actively monitoring the crypto space in Singapore, issuing investor alerts relative to unregulated entities. Last month, MAS added imToken, a non-custodial crypto wallet, to its Investor Alert List. The list serves as a means for the regulator to draw attention to entities that may be actively trading within the city-state while being wrongly perceived by the investing public as licensed or regulated entities. Greater powersIn response to potential risks, MAS had previously issued guidance on risk-mitigating measures for CMSL holders conducting unregulated business with retail investors. The FIMA bill seeks to empower MAS further by enabling it to issue written directions specifying the minimum standards and safeguards for CMSL holders and their representatives engaging in unregulated businesses. Cryptocurrency exchanges, potentially categorized as CMSL holders, along with Major Payment Institution (MPI) licensees, may face increased regulatory scrutiny. MAS has been active in implementing measures to curb speculation in cryptocurrency investments and has updated its regulatory framework for stablecoins. The bill introduces additional provisions empowering MAS to compel individuals to participate in interviews and provide written statements. It grants MAS the authority to enter premises without a warrant and obtain court orders to seize evidence. Furthermore, the bill allows MAS to approve agents appointed by foreign regulators for inspecting Singaporean financial institutions. Precursor to ETF offeringThe potential ramifications of the bill extend beyond local regulatory dynamics. Industry observers suggest a connection between these developments and the recent approval of spot bitcoin exchange-traded funds (ETFs) in the United States. Lasanka Perera, CEO of Independent Reserve Singapore, recently highlighted that the approval of bitcoin ETFs in the U.S. will likely attract major global wealth management firms, intensifying the demand for bitcoin and transforming it into an accessible asset class for traditional institutions. Perera sees relevance in this proposed legislation as it pertains to the potential offering of spot bitcoin ETF products within the Republic of Singapore. While he speculates that it's too early to tell, he said Singapore’s proposed new bill to enhance regulatory authority over financial services, including bitcoin futures, makes provisions for possible spot bitcoin ETFs in the Republic. As Singapore continues to refine its regulatory framework, the proposed amendments reflect a broader trend of regulatory tightening in the global cryptocurrency landscape, emphasizing the importance of compliance and risk management for industry participants. 

The Klaytn Foundation and Finschia Foundation have jointly submitted a governance proposal to launch a new mainnet created by merging their respective blockchain ecosystems. The proposals have been submitted for open discussion, with voting scheduled for Jan. 26 to Feb. 2, according to an official announcement on Wednesday (KST).Photo by Shubham's Web3 on UnsplashThe main objective of this initiative is to create Asia’s largest Web3 ecosystem by combining key features of both blockchains. To do so, the two foundations plan to share their technologies, services and business networks and fortify connections between their partners like their mother companies Kakao and LINE, who have contributed to their development and expansion. “We are excited to be taking the first step toward unlocking the enormous synergy of merging the public blockchains started by Kakao and LINE, which are both leading IT companies in Asia,” the two foundations said. “We will give our best to make this merge an opportunity to innovate and lead the Asian blockchain industry in both technology and adoption.” An unprecedented mainnet ecosystemThe merger will bring together Klaytn and Finschia’s networks in different Asian countries, like Klaytn’s leverage in South Korea, Singapore and Vietnam, and Finschia’s service network in Japan, Taiwan, Thailand and Abu Dhabi. Once the combined ecosystem is launched, it will offer over 420 decentralized apps (dApps) and services, 45 governance partners and some 450 Web3 resources, becoming a mammoth Web3 network capable of swaying the trajectory of the Asian market. In addition, the blockchain will be connected with both Kakao and LINE messengers – two well-known messenger apps in Asia – opening up access to a vast continental user base of over 250 million people. The integration is also expected to catalyze the creation of new Web3 infrastructure in Asia, boosting scalability and liquidity. Future business plansThe joint foundation is specifically set to undertake projects in areas like RWA tokenization, GameFi, DeFi verticals, messenger-based Web3 services and digital commerce through partnerships with Japanese, South Korean and Southeast Asian firms. By leveraging its access to Kakaotalk and LINE users, the new public blockchain has the potential to be a springboard for IT and entertainment enterprises in Asia. Improved tokenomicsWhat may especially interest shareholders and users alike is a new native token that will be issued on the merged network, replacing the foundations’ respective tokens KLAY and FNSA. Holders of KLAY and FNSA will be able to swap their tokens for the new one. The proposed tokenomics system for the new token emphasizes sustainable value creation. This includes a lower base inflation rate and a 3-layer burning model created to encourage deflation as activity on the network increases. 24% of newly issued tokens will also be burned immediately as a trustworthy Zero Reserve Tokenomics measure. This will all be supported via an ecosystem fund and infrastructure fund that are constantly replenished via block rewards, rather than relying on reserves.Enhanced governance and interoperabilityKlaytn and Finschia also plan to bring together their experiences in practicing good governance to build a  permissionless node validation system to put the spotlight on users and the community, promoting transparency, trust and openness. To support the seamless migration and interoperability of existing dApps and services on Klaytn and Finschia, the merged chain will support the smart contract platforms EVM and CosmWasm. Ethereum and Cosmos builders will thus be able to gain access to the network. The foundations are set to host an upcoming event called Klaytn Community Town Hall on Friday to introduce the proposal and facilitate open dialogue and feedback.

Singapore’s Central Bank Paves the Way for Digital Asset NetworksSingapore’s Monetary Authority (MAS) has taken a significant step towards the future of digital assets by proposing a comprehensive framework for the design of open and interoperable networks for tokenized digital assets.Photo by Pixabay on PexelsDetailed frameworkIn a report published on Monday, titled “Enabling Open & Interoperable Networks,” MAS presented a detailed framework aimed at understanding the design options necessary to facilitate the seamless trading of digital assets across diverse networks and liquidity pools. The framework is rooted in the core principles of financial market infrastructure and draws inspiration from cutting-edge projects that have been at the forefront of advancing these concepts.To ensure a robust and comprehensive approach, the report was jointly developed with subject matter experts from the Bank for International Settlements’ (BIS) Committee on Payments and Market Infrastructure (CPMI), with valuable contributions from prominent financial institutions including DBS Bank, JP Morgan, HSBC, SBI Digital Asset Holdings, Standard Chartered, and UOB.MAS defines digital asset networks as platforms that leverage distributed ledger technology (DLT) or blockchain to enable secure and efficient transfers of digital assets without the need for traditional intermediaries. These networks serve as the foundation for open and interoperable infrastructure, facilitating the issuance, transfer, and custody of digital assets. By promoting transparency, efficiency, and trust, the report suggests that they will play a pivotal role in shaping the digital asset ecosystem.Project GuardianThe report underscores the immense potential of digital asset networks in a future financial landscape, where digital assets and currencies can be seamlessly exchanged across different networks. MAS believes that these networks could revolutionize the way financial transactions occur, leading to increased efficiency and expanded possibilities. The framework also lays the groundwork for future exploration as part of the Project Guardian initiative, encompassing additional focused themes such as Trust Anchors and Institutional DeFi.MAS has also announced the expansion of Project Guardian to include a broader range of financial asset classes. The project now features an industry group comprising 11 leading financial institutions that will spearhead industry pilots in asset and wealth management, fixed income, and foreign exchange. Esteemed banks such as HSBC, Standard Chartered, DBS, and Citi are set to conduct multiple trials focusing on tokenization. For instance, Standard Chartered, in collaboration with Linklogis, is developing an initial token offering platform to issue asset-backed security tokens listed on the Singapore Exchange.Despite its cautious stance on cryptocurrency speculation, MAS recognizes the immense potential for value creation and efficiency gains within the digital asset ecosystem. Leong Sing Chiong, MAS’ Deputy Managing Director of Markets and Development, emphasized the authority’s optimism, stating: “We see significant potential for value creation and efficiency gains in the digital asset ecosystem.”This latest initiative by MAS comes on the heels of its recent proposal for standards governing the use of digital money, including central bank digital currencies (CBDCs) and stablecoins. Singapore’s central bank is paving the way for the future of digital assets and making a strong effort to assert its position as a global leader in digital asset innovation through the establishment of this framework alongside industry collaboration.