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Korea unveils detailed plan for retail CBDC transaction pilot with 100K participantsThe Bank of Korea (BOK), Financial Services Commission (FSC) and Financial Supervisory Service (FSS) jointly announced on Thursday (local time) their comprehensive plan to pilot a central bank digital currency (CBDC). This pilot program will concentrate on two key areas: retail transactions and technical experiments within simulated environments.For the retail transaction aspect, the test aims to give citizens direct experience in using the new digital currency, helping them understand its advantages. This practical approach will promote public familiarity with the CBDC.In terms of technical experiments, these will be conducted in partnership with various banks. The goal is to explore and develop methods for constructing a financial market infrastructure suitable for the future, leveraging the capabilities of the digital currency.Photo by Terrence Low on UnsplashRetail CBDC test to commence in Q4 2024The initiative to examine retail transactions using a CBDC is scheduled to begin in the fourth quarter of 2024. This test will focus on improving how vouchers work. Currently, the use of vouchers faces several challenges, such as high fees, complex and slow settlement procedures and the risk of fraudulent transactions. CBDC-based deposit tokens programmed with the digital voucher functionality could help solve these problems. The exploration of digital vouchers within the realm of CBDCs is not just a concern in Korea but also a topic of global interest.Banks that will participate in the CBDC retail transaction test are to be selected by the end of the third quarter of next year, following necessary procedures such as the financial regulatory sandbox policy. These selected banks will receive the green light to issue deposit tokens within this regulatory sandbox framework. They’ll be in charge of recruiting and managing test participants, which includes both individuals and merchants. Additionally, these banks will be responsible for developing digital wallets for users and handling payment transactions. On the other hand, any bank interested in joining technical experiments in simulated environments may apply to do so until mid-December this year.Citizens who want to take part in the retail transaction test for the CBDC can apply through the banks involved in the test. However, it’s important to note that since this CBDC utilization test is a limited trial, the number of participants will be limited to a maximum of 100,000.The retail transaction test for the CBDC will involve three stages: issuance, distribution and payment. Initially, banks will issue deposit tokens with digital voucher functions upon request. Users will then use these tokens to buy goods from merchants, with the transactions being settled accordingly. Before starting, the BOK, FSC and FSS will propose pilot tasks to the banks, following consultations with relevant agencies and the review of pertinent laws. Banks will also propose tasks related to the voucher function. During the test, these tokens will be used solely for digital voucher transactions, and peer-to-peer transfers won’t be allowed.Simulated environment experiments: three use casesFor technical experiments within simulated environments, the financial authorities have selected three use cases focused on examining the technical feasibility of new types of financial instruments.The first objective is to collaborate with Korea Exchange, the only securities exchange operator in the country, to connect the CBDC system with a carbon credit trading simulation platform. This platform will be based on an external distributed ledger. The key objective here is to assess if the “delivery versus payment” (DvP) mechanism between carbon credits and special payment tokens can function smoothly. DvP is a settlement method that ensures the transfer of securities occurs only after the corresponding payment is made.The second objective will see collaboration with the Korea Financial Telecommunications and Clearings Institute (KFTC). In this scenario, a hypothetical issuer will release tokenized assets to the public through a public offering. To manage this, deposit tokens that match the subscription amount by investors will be temporarily frozen, preventing them from being liquidated. After the final allocation of these tokenized assets is determined, the system, using smart contracts, will automatically transfer funds equivalent only to the allocated tokenized assets.The last objective revolves around advancing the concept of a unified ledger introduced by the Bank for International Settlements (BIS). In this endeavor, the BOK aims to issue digital demo securities within the CBDC system. Following this, an experiment will be conducted where financial institutions will have the opportunity to trade these digital securities using the institutional CBDC. This trading will be executed using the DvP method.

eToro, M2 secure licenses bolstering UAE crypto developmenteToro, the retail and social trading platform, has successfully secured a coveted license from the Abu Dhabi Global Market (ADGM) in the United Arab Emirates (UAE). Additionally, virtual asset firm M2 has become a fully regulated Multilateral Trading Facility (MTF) and custodian through the ADGM.Photo by Mitul Grover on UnsplasheToro global expansionIn eToro’s case, the Financial Services Permission (FSP) license empowers it to operate as a broker in securities, derivatives and crypto assets within the UAE. The firm announced its regulatory success on Monday, the first day of Abu Dhabi Finance Week.eToro’s foray into the UAE market is part of its broader global expansion plan. With an eye on the potential of the UAE’s investor base, eToro seeks to extend its business beyond just providing trading opportunities. The company is committed to fostering financial education and encouraging community engagement among its users in the region.The latest issuance of a full license by the ADGM is the culmination of an initial in-principle authorization obtained over a year ago, showcasing a deliberate approach to regulatory compliance. eToro Founder and CEO Yoni Assia commented on the development in a press release, stating:“The approval of our operating license by ADGM is a key milestone in our continued global expansion. Abu Dhabi is increasingly recognized as a growing fintech hub, and we are excited to become part of this flourishing ecosystem.”M2 primed to onboard retail and institutional clientsSimultaneously, cryptocurrency exchange M2 has also been recognized by the ADGM, earning the status of a fully regulated Multilateral Trading Facility and custodian. M2 is now permitted by this license to serve both retail and institutional clients in the UAE, offering services such as crypto custody, UAE dirham-based Bitcoin and Ethereum trading and on/off-ramp services for the dirham (AED).Stefan Kimmel, CEO of M2, considers the timing of this license as particularly advantageous, coinciding with a renewed positive sentiment among investors. M2’s range of services in the UAE market is designed for diverse client groups, addressing the needs of both retail and institutional investors.Official platform launchIn rolling out its service offering in Abu Dhabi, the trading and custodial services platform has partnered with Abu Dhabi Commercial Bank (ADCB). Commencing this week, both retail and institutional clients within the UAE can now register on the M2 platform.The firm will offer custody and trading of digital assets while also extending yield-bearing products of up to 10.5% on BTC and ETH.The strategic geographical location, business-friendly environment and forward-thinking regulatory approach make the UAE an attractive destination for international crypto players seeking operational licenses. Earlier this month, the ADGM’s registration authority introduced comprehensive regulations, particularly focusing on Web3 organizations. The regulatory framework has focused in particular on distributed ledger technology (DLT)-oriented foundations and decentralized autonomous organizations (DAOs).The successful acquisition of ADGM licenses by eToro and M2 marks a significant milestone for both entities. As these platforms introduce their innovative services to the region, the UAE is poised to play a central role in shaping the future of cryptocurrency.

Credit Saison, one of the largest credit card issuers in Japan, is accelerating its global venture strategy with the creation of Onigiri Capital, a new fund targeting early-stage startups building on blockchain technology. Set up in Singapore last month through Credit Saison’s corporate venture arm, Saison Capital, the vehicle is aiming for up to $50 million in commitments and will run for 10 years, with an optional two-year extension. The fund has already secured $35 million toward its target.Photo by Markus Winkler on UnsplashBuilding on a fintech track recordThe initiative is part of Credit Saison’s broader plan to expand in emerging markets and spur innovation in financial services, drawing on Saison Capital’s track record. Established in 2019, the venture arm has backed fintech startups across Asia and, since 2021, has increasingly focused on blockchain-based finance, investing in more than 40 companies. The firm said those investments laid the groundwork for Onigiri Capital, which will also enable other financial institutions to invest alongside Credit Saison in promising blockchain ventures. Onigiri Capital will concentrate on five areas: stablecoins, payments, asset tokenization, decentralized finance (DeFi), and financial infrastructure. The fund will invest primarily at the seed and early stages, with an emphasis on long-term growth. Managing the fund are Qin En Looi, a partner at Saison Capital involved in over 40 blockchain investments, and Hans de Back, a venture investor with more than two decades of experience. Cross-border stablecoin pilotThe launch comes as Japan steps up efforts in digital assets beyond investment alone. According to Electronic Times, the first phase of “Project Pax,” a cross-border stablecoin remittance pilot involving financial institutions in Japan and South Korea, concluded successfully last week. Participants were Progmat—a tokenization platform backed by a consortium of major institutions, including MUFG—along with Datachain and Shoko Chukin Bank from Japan, and Shinhan Bank, NH Nonghyup Bank, and Kbank from South Korea. Fair Square Lab and Korea Digital Asset Custody helped develop an application programming interface (API) for the trial. The pilot demonstrated the feasibility of a network that converts fiat currency into stablecoins for on-chain transfers and then back into local currency at the destination, an approach expected to reduce the time and cost of cross-border payments. The results add momentum to Japan’s bid to modernize financial infrastructure, a backdrop that Onigiri Capital aims to capitalize on as it deploys capital into the sector.