China Launches Digital Yuan ATMs in Hainan Resort City of Sanya

According to a report by Nikkei Asia, Kasikornbank (KBank), Thailand’s second-largest bank, has entered into a partnership with Bangkok-based firm Orbix Technology and Singapore’s StraitsX to roll out a cross-border payments solution based on the use of stablecoins. StraitsX provides payments infrastructure for digital assets in Southeast Asia. It also issues XSGD, XUSD and XIDR, stablecoins that are pegged to the Singapore dollar, the U.S. dollar and the Indonesian Rupiah. Orbix Technology contributes towards the collaboration by providing blockchain infrastructure, in this case, its Quarix blockchain, which was developed to support transactions in both foreign currencies and baht, convert real-world assets into digital tokens and enable real-world identity confirmation of the blockchain user.Photo by Mathew Schwartz on UnsplashProject Carina The groundwork for this latest collaboration was accomplished through a partnership between KBank and American investment bank JPMorgan’s JPM Coin (now known as Kinexys Digital Payments) in April. Known as Project Carina, the collaboration explored wholesale cross-border payments using Q-money, KBank’s digital Thai baht, which runs on Orbix Technology’s Quarix blockchain and forms part of Thailand’s regulatory sandbox. The objective of Project Carina was to effect the transfer of Thai baht, using Q-money, to a U.S. dollar-denominated bank account, via Kinexys Digital Payments. Using that process, a cross-border multi-currency transfer could be effected efficiently in real time. Spending Thai baht in Singapore In part, building upon that earlier project, this latest collaboration, which commenced at the end of November, brings StraitsX into the fold alongside KBank and Orbix. The service targets Thai tourists visiting Singapore, enabling them to spend their Thai baht-based Q-money at retail outlets in Singapore. Thai visitors account for 2.4% of arrivals to the city-state each year. Many retail stores in Singapore now enable the use of payment systems like PayNow, a real-time payment service offered by a group of Singaporean banks; GrabPay, a payments wallet that features as part of the Grab super-app; and Alipay+, another cross-border mobile payments system. StraitsX has collaborated with these payment systems, opening up access to this latest offering led by KBank. In November, StraitsX added access to the GrabPay and Alipay+ systems. Users of the Q-money app can scan the codes generated via these payment systems, enabling the user to pay in Thai baht for the item they are purchasing priced in Singaporean dollars. Effectively, the system enables and exchange and conversion of digital baht for the StraitsX XSGD Singaporean dollar stablecoin. The three companies showcased their blockchain-based cross-border payment innovation at the Singapore FinTech Festival last month. At the time, Orbix Technology Managing Director Yarnvith Raksri stated:”Quarix has played a significant role in driving the Q-money by KBank app and integrating it with the StraitsX system to allow seamless cross-border payments via blockchain, making them as convenient as domestic transactions.” KBank competitor Siam Commercial Bank (SCB), Thailand’s oldest bank, announced in October that it was partnering with fintech firm Lightnet to launch a stablecoin-based remittance service.

Banking Difficulties Remain in Hong Kong for Crypto Start-UpsWhile Hong Kong has demonstrated a very clear crypto-friendly stance over the course of the past six months, crypto start-ups are still struggling with banking in the Chinese autonomous territory.Photo by Manson Yim on UnsplashLicensing backlogAll the signs are that Hong Kong is striving to develop itself as a regional hub for crypto and blockchain related business. Encouraged by that stance, against a background of the United States becoming openly hostile to crypto over that very same time frame, applications are streaming in from international firms to be licensed to operate their businesses in the city.In discussion with crypto start-up applicants, CoinDesk has established that the issue extends to firms that have already obtained a license to operate. To compound matters, the Hong Kong regulator, the Securities and Futures Commission (SFC), has a shortage of manpower, with just eight officials currently working on the applications of eighty crypto firms.Speaking to that backlog, Amy Yu, APAC CEO for Swiss crypto financial services company, SEBA Bank, stated: “This probably would have been a different story six or nine months ago.”A known problemIt appears that both the SFC and its regulatory peer, the Hong Kong Monetary Authority (HKMA) were aware of the issue and tried to get out ahead of it. Late last month, both regulators convened a meeting with bank officials and virtual asset service providers (VASPs).The objective was to try to forge a path forward such that banks could amend their approach, enabling greater facilitation and acceptance of crypto businesses such that the banks would be more inclined to approve bank account applications from those fledgling businesses.Arthur Yuen, Deputy CEO of the HKMA addressed the matter in a blog post published to the regulator’s website on April 27. Yuen was clear in calling on the banks to enable banking for VASPs:“With the implementation of the regulatory regime for VA [virtual assets] activities in Hong Kong and the strengthening of supervisory regimes in different jurisdictions according to the international standards, and as the banking industry develops a better understanding of the VA industry over time, we expect that regulated virtual asset service providers (VASPs) will be able to successfully apply for a bank account through a reasonable process.”Banker resistanceElaborating on the matter further, it’s clear that Yuen and his colleagues understand the importance of banking in enabling this nascent business sector such that the broader strategy of a pro-crypto business environment is affected in Hong Kong. “To attract businesses from new markets, it is crucial to have high quality financial services, while enhancing corporate access to bank accounts would be one of the key priorities,”he stated.An attendee at that regulator-organized round-table last month said that “It was more like a wish list from the regulator,” and that “whether the banks fully embrace it is another matter.” The issue remains as a major impediment to the ability of crypto start-up companies to operate, Some are being forced to try and work around the stumbling block, relying instead on overseas banking partners.

No Turkish Delight for Crypto Exchange CEO Sentenced to 11,196 YearsIn a landmark ruling, Faruk Fatih Ozer, the 29-year-old Turkish Founder and CEO of defunct Turkish crypto exchange Thodex, has been sentenced to 11,196 years in prison for orchestrating a massive fraud that left investors out of pocket.Photo by engin akyurt on UnsplashExtradited from AlbaniaBloomberg reported on Friday that Ozer, the mastermind behind the Thodex exchange, fled to Albania in 2021, vanishing along with millions of dollars in investor assets as the exchange suddenly crumbled.His arrest in Albania on an Interpol warrant marked the beginning of a lengthy legal battle. Having spent months on the run, he was finally extradited back to Turkey in June, where he faced charges of money laundering, fraud, and organized crime. During the trial in Istanbul, Ozer defended himself, claiming that his actions did not demonstrate criminal intent. He asserted:“I am smart enough to lead any institution on Earth.”“That is evident in this company I established at the age of 22. I wouldn’t have acted so amateurishly if this were a criminal organization,” he added. Nevertheless, the court found him guilty, along with his sister Serap and brother Guven, who faced the same charges.Lengthy jail termThe sentences handed down were notably long, with the defendants sentenced separately for multiple crimes against 2,027 victims. Following the abolition of the death penalty in 2004, lengthy prison sentences are quite common in Turkey.Prosecutors had initially sought a jaw-dropping 40,562-year prison sentence for Ozer, although the difference would have been purely symbolic when compared with the sentence which was ultimately handed down. The Thodex exchange, founded in 2017, quickly rose to prominence as one of Turkey’s largest cryptocurrency platforms.Ozer’s financial acumen earned him national recognition, and he even cultivated ties with influential pro-government figures. However, the sudden implosion of the Thodex exchange in April 2021 shook the cryptocurrency world. Investor assets vanished, and Ozer went into hiding.Reports initially indicated that Ozer had fled with assets worth $2 billion, but the prosecutor’s indictment put the total losses to Thodex investors at 356 million Turkish liras. The depreciation of the lira and rampant inflation since the exchange’s collapse means that this amount is now equivalent to around $13 million on the international markets.Lagging regulationThe Thodex case serves as a stark reminder of cryptocurrency market risks, given its immature state and the lag in regulators responding to the innovation in order to ensure a safe marketplace for investors.Despite this setback in the development of the crypto ecosystem within Turkey, interest in crypto is stronger than ever. A recent report produced by Seychelles-based crypto exchange KuCoin found that there has been a significant increase in crypto market participants in Turkey over the course of the past 18 months. It’s likely that runaway inflation of the Turkish lira is providing Turks with the motivation to investigate crypto as an alternative.