OKX Follows Path Towards Dubai Licensing

Kazakhstan Launches NPC With CBDC Implementation by 2025Kazakhstan’s National Bank (NBK) has unveiled the National Payment Corporation (NPC), a dedicated entity responsible for spearheading the development and launch of the country’s central bank digital currency (CBDC), known as the digital tenge.In a press release published last Friday, the NBK set out that the launch of the NPC is effectively a restructuring of the Kazakhstan Center for Interbank Settlements. The new entity has been entrusted with overseeing the national payment system.This mandate includes overseeing critical functions like interbank clearing services, facilitating money transfers, and managing digital identification. However, the NPC’s central mission revolves around establishing a robust “digital financial infrastructure” with a primary focus on realizing the digital tenge.Photo by Uladzislau Petrushkevich on Unsplash2025 targeted launch dateThe journey toward the digital tenge began in February of this year, with an ambitious launch date set for 2025. Deputy Governor of the NBK, Berik Sholpankupov, initially articulated a vision centered on a “collaboration between traditional finance and DeFi,” aimed at significantly improving financial inclusion and strengthening international trade.As of now, the CBDC pilot in Kazakhstan has advanced to a controlled environment pilot phase involving actual consumers and merchants. One of the key partners in this venture is Binance, the world’s largest cryptocurrency exchange. Binance is actively supporting the pilot through its technical solution, BNB Chain, marking a convergence between traditional financial institutions and the blockchain-based cryptocurrency sector.Kazakhstan’s pursuit of CBDCs aligns with a global trend as numerous countries worldwide explore the potential of CBDCs. An astounding 105 countries, representing a substantial 95% of the global gross domestic product (GDP), are currently exploring the concept, highlighting the collective recognition of the transformative potential of digital currencies in shaping the future of finance.Last week it emerged that the NBK had entered into a collaboration with the global financial messaging service SWIFT relative to the beta-testing of a CBDC.Attracting global exchangesIn a move that bolsters the development of crypto in the central Asian country, Binance launched a regulated digital asset platform in collaboration with the local Freedom Finance Bank. Around the same time, Bybit secured in-principle approval to trade within the country from the local regulator.Kazakhstan’s proactive stance toward cryptocurrency is also evident in its taxation policies. In 2022, the government collected approximately $7 million in tax payments from cryptocurrency mining entities following the implementation of revised regulations governing the fiscal responsibilities of cryptocurrency mining.Additionally, the government introduced legislation aimed at curbing excessive energy consumption by domestic crypto miners, instituting licensing requirements, and making minor adjustments to the taxation framework.Kazakhstan’s steps in establishing the National Payment Corporation and venturing into the realm of CBDCs reflect the country’s interest in embracing the digital era and staying at the forefront of financial innovation. As the industry looks on, Kazakhstan’s digital tenge project could serve as a model for others seeking to bridge the gap between traditional finance and the exciting possibilities of DeFi.

Recently, the top five Korean banks have seen a significant outflow of funds in their demand deposits – worth about KRW 2 trillion ($1.52 billion) – to crypto markets as local investors are rushing to withdraw their money from banks to invest in the crypto and stock markets. The recent surge of Bitcoin to KRW 100 million prompted the funds’ outflow, local media Etoday reported. This is a substantial turn from just a week ago, when these banks saw a KRW 23.5 trillion increase in their demand deposits just in a month.  The previous rise in demand deposits at banks, however, was also driven by local investors who used these accounts as a “station” to temporarily store their money for future crypto investments. These accounts are highly liquid, since users can deposit or withdraw funds at any time without incurring penalties from banks.Photo by Emile-Victor Portenart on UnsplashBank deposits flowing into crypto Data from the five banks –  KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NH Nonghyup Bank – show that their combined demand deposits totaled KRW 612.4 trillion on Friday, down KRW 2.2 trillion from late last month.  The crypto investing trend has prompted investors to withdraw their funds not only from demand deposit accounts, but also from fixed deposit and installment savings accounts. During the same period, the five banks’ fixed deposits saw a KRW 5.1 trillion decline from KRW 886.2 trillion to KRW 881 trillion, with installment savings decreasing by KRW 2.5 trillion, from KRW 33.2 trillion to KRW 30.6 trillion.  In particular, NH Nonghyup Bank, which offers real-name accounts to the crypto exchange Bithumb, has witnessed a decline of over KRW 2 trillion in its demand deposits over the past week. Shinhan Bank also reported an increase in dealing with more crypto assets.  Bullish crypto and stock market With Bitcoin prices hitting a new high, the U.K. bank Standard Chartered forecasts that Bitcoin could eventually reach $200,000 by 2025. The excitement around crypto has boosted the amount of cryptocurrencies traded against the Korean won across the top five crypto exchanges in Korea, reaching KRW 78 trillion.  Korean stock markets are also signaling a bullish sentiment, with the amount of investor deposits exceeding KRW 53 trillion this month. Investor deposits refer to customer deposits at securities companies saved for investment purposes or those left unclaimed after selling stocks.  Declining interest rates Meanwhile, local savings products with over 4% interest rates are no longer to be seen. According to the Korea Federation of Banks, a one-year savings product with the highest interest rate among the top five local banks offers an annual rate of 3.55%.  Online-only banks, which typically offer relatively higher rates than other traditional banks, are rapidly lowering rates on their saving products. The highest annual rate for Kakao Bank’s fixed deposits products stands at 3.5%, down by 0.1 to 0.2 percentage points depending on their maturity.  Kbank has also decreased rates for fixed deposits by 0.05 percentage points, lowering the rate for its flagship fixed deposits product from 3.7% to 3.65%. 

Legislation geared towards regulating stablecoins has reached the Legislative Council stage in the Chinese autonomous territory of Hong Kong.  The bill, which extends to a 285 page document, has been formulated following “extensive consultations” with industry stakeholders, according to Eddie Yue, CEO of the Hong Kong Monetary Authority (HKMA).  This latest development moves the Chinese autonomous territory one step closer to having a comprehensive regulatory framework in place for stablecoins. The bill’s arrival at the Legislative Council follows its publication on Dec. 6 in Hong Kong’s Gazette. Subsequently, on Dec. 18, it made its preliminary entry at the Legislative Council by way of a first reading. The legislation will deem a digital asset a stablecoin if it is operated on a distributed ledger, is expressed as a unit of account and maintains an equivalent value relative to another asset that it references. Digital assets issued by governments or central banks will be excluded from that stablecoin definition.Photo by Laurentiu Morariu on UnsplashThree readings requiredBefore the bill can be enacted into law, it is required to go through a series of three readings. Allied to that process is a requirement for a series of debates, with the bill coming under the scrutiny of lawmakers. Depending upon the issues raised, this process may also require the introduction of amendments to the proposed legislation. If passed following the third reading, it will then be forwarded to the autonomous territory’s chief executive, John Lee Ka-chiu, to be signed into law. Once signed into law, stablecoin issuers in Hong Kong will then be required to obtain a license from the city's central bank, HKMA. That licensing process would implicate the HKMA scrutinizing the applicant with an emphasis on the evaluation of the issuer, its resources, the use of reserve assets and the means through which the stablecoin’s value will be rendered stable. Stablecoin optimismThis latest milestone has provoked a cause for optimism among some commentators. Sean Lee, co-founder of Hong Kong-based Web3 firm IDA, told the South China Morning Post (SCMP) that “the applications of stablecoin will be numerous.” Lee outlined that stablecoins can be used for payments, settlements, payrolls and financing, while adding that “new products will spring up, and transactions will be faster, instant, 24/7 – and at a lower cost.” Dominic Maffei, Standard Chartered’s head of digital asset and fintech for Hong Kong, is similarly encouraged. Maffei stated: “As of today, we think that stablecoins are the best available tool for connecting traditional finance and Web3 markets and have proven use cases and business models to support that belief.” Once enacted, the bill is likely to have a significant impact on the stablecoin market in Hong Kong. In Europe, the application of the Markets in Crypto Assets (MiCA) regulation is having such an impact. It has led to a growth in Euro-denominated stablecoin trading while leading U.S. dollar stablecoin Tether (USDT) is being delisted by many platforms due to its non-compliance with these regulations.