Chinese City Unveils Plan to Develop Metaverse

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.

Japan’s Aozora Bank Plans Digital Currency LaunchGMO Aozora Net Bank, a Japanese commercial bank and a member of a Japanese corporate consortium comprising over 100 members, has unveiled plans to introduce a blockchain-based digital currency known as DCJPY.Photo by David Edelstein on UnsplashDCJPYAccording to Reuters, the blockchain-based digital currency is scheduled for launch in July of the upcoming year. DCJPY will be a Japanese yen-based stablecoin, underpinned by deposits and harnessing blockchain technology to enable instantaneous and seamless transactions. Unlike conventional transfer methods that rely on a bank’s data system, DCJPY circumvents this process via a blockchain network, leading to a reduction in associated costs.Efficient inter-company paymentsThe primary objective of Aozora Bank’s venture is to streamline payments between businesses. The incorporation of blockchain technology offers a secure, transparent, and efficient transaction framework. By adopting this digital currency, companies can experience the advantages of swift settlements while concurrently mitigating the financial outlays tied to traditional banking systems.This consortium recognizes the vast potential of blockchain technology and is seeking to harness its inherent benefits to enhance diverse business operations. With the upcoming launch of DCJPY, the consortium will effectively be promoting the use of blockchain-based digital currencies within Japan and catalyzing innovation within the financial sector. The project has the potential to bring about heightened efficiency, cost reductions, and an overall enhancement in the realm of financial transactions.Banking heavyweightsThis move by Aozora aligns with the global surge in interest and adoption of blockchain technology. The bank operates as a prominent member of a broader consortium, which encompasses a multitude of Japanese corporations. The consortium includes major players in Japanese banking, including Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group, and Sumitomo Mitsui Financial Group. It has been meeting frequently to assess ways in which it can build a common settlement infrastructure for digital payments.MUFG is already deeply involved in blockchain-based innovation. The banking group has established its very own Progmat blockchain tokenization platform, which includes the Progmat Coin stablecoin platform.Last month, the bank announced a partnership with Binance which will endeavor to investigate the issuance of public blockchain stablecoins based on the Japanese yen. MUFG’s Progmat includes Mizuho as one of its clients on the blockchain platform.Stablecoin regulationThese recent announcements and Aozora Bank’s stablecoin plans follow the passage of a bill by Japan’s parliament earlier this year that restricts stablecoin issuance by non-banking institutions. The bill stipulates that only licensed banks, trust companies, and registered money transfer agents are permitted to issue stablecoins. Furthermore, it establishes a registration system for financial institutions planning to launch such digital assets, accompanied by anti-money laundering measures.A report published by Nikkei Asia earlier this year suggested that three Japanese banks, namely Shikoku Bank, Tokyo Kiraboshi, and Minna Bank, had all expressed the intention to issue stablecoins. In June, Japanese global information technology solutions company Fujitsu announced that it intended to launch a blockchain-based platform in conjunction with the Asian Development Bank.

Upbit Operator Doubles Down on ESG ManagementDunamu, the operator of the popular Korean crypto exchange Upbit, issued a press release on Friday stating it will donate 500 million KRW (~$385,000) to the Korean Red Cross in support of recovery efforts for the recent wildfire damage in Gangneung, a city located east of Seoul.©Pexels/Matthias ZomerESG managementThis is part of its efforts to double down on its environmental, social, and governance (ESG) management, according to Korean economic media Biz World.Wildfire recovery effortsLast year, Dunamu also donated 3 billion KRW (~$2.3 million) to Hope Bridge, a disaster relief association in Korea, to support the swift recovery from wildfires that ravaged areas near the cities of Uljin and Samcheok.Metaverse and NFTs for plant conservationUnder the slogan “climate change action,” Dunamu is engaging in various projects. Last month, the exchange operator launched the 2nd foRest campaign in collaboration with the Korea Forest Service and the Korea Forest Welfare Institute.The purpose of this campaign was to encourage citizens to participate in recovering wildfire-affected areas. Every tree planted in Dunamu’s metaverse platform 2nd Block led to the actual planting of two trees in the ravaged areas. More than 30,000 trees were planted through the project, and moreover, 10,000 of the participants were rewarded with coupons that can be exchanged for saplings.Dunamu has also made endangered plant conservation efforts with the Korea Arboreta and Gardens Institute. Upbit NFT Marketplace showcased ten endangered plants in NFT editions.Veronica Star Light, one of the editions revealed during the first airdrop, sold out within a day, reflecting its popularity. Dunamu will use the fees collected from these transactions to establish a fund for endangered plant conservation.Protecting plant diversityDunamu Chairman Song Chi-hyung said the company has been studying various means to utilize its technology and resources to contribute to society, and that it will continue to make multifaceted efforts to protect plant diversity.