Amber Group Targets Trust in Web3 Via Thoughtworks Partnership

BNP Paribas Partners With Chinese in Digital Yuan PushThe Chinese authorities continue with their sustained efforts to promote use of the digital yuan, on this occasion by hooking up with French international banking group, BNP Paribas.According to the South China Morning Post (SCMP) on Friday, the partnership will see BNP Paribas collaborating with the Bank of China (BOC) to promote the digital yuan to its corporate clients. The digital yuan or e-CNY is a digital representation of the Chinese sovereign currency, issued by the BOC.Photo by Eric Prouzet on Unsplashe-CNY system accessAs part of the arrangement, BNP Paribas China will connect into the BOCs system, accessing an e-CNY management system. The BOC has authorized ten banks in China including the four state-owned banks, all of which are domestic lenders, to deal with its digital currency business.The direct e-CNY system access enables straight-through processing, allowing BNP Paribas to offer digital wallet functionality to its corporate clients relative to the digital yuan. Essentially, the system will allow BNP Paribas China’s corporate clients to link their bank accounts with an accompanying digital wallet. Other functionality that will be enabled as a consequence includes access to smart contract applications through the m-CBDC bridge (central bank digital currency).BNP Paribas China CEO CG Lai commented on the partnership: “While this collaboration can supplement the Bank’s offline payment collection capabilities and further optimize our clients’ account structure, this also reinforced the Bank’s commitment to the China market.” Lai outlined that the bank intends to enhance customer service capabilities by pursuing digital innovation that, like in this instance, contributes to China’s economic development.Louise Zhang, Head of BNP Paribas China Transaction Banking claimed that the partnership will “provide innovative, efficient cash management and trade financing services to local and multinational clients.”CBDC developmentThere has been a lot of activity in recent years when it comes to the development of CBDCs. The central banks of most nations have carried out some level of preparatory or investigative work relative to a digital currency. However, China has been by far the leader in its development of a CBDC.The BOC first began research into a digital currency in 2014. The country’s State Council approved the development of the digital yuan in partnership with China’s commercial banks in 2017. Beyond initial development, a testing phase began in 2019 with the project known as the Digital Currency Electronic Payment (DCEP) system emerging as the first version of the digital yuan after a number of years of development.In 2020, the BOC began more extensive testing of the digital currency in four Chinese cities — Shenzhen, Suzhou, Chengdu and Xiong’an. To promote use of the currency at that time, they offered free digital yuan to residents of those cities to spend, in that way, stepping up efforts to popularize the digital currency.Last month, the administrators of the Chinese city of Xuzhou announced that it was in the process of publishing a pilot scheme which will set out a means for promoting China’s e-CNY digital currency. Also in April, the eastern city of Changshu clarified that it is gearing up to commence paying state employees in the city in e-CNY. According to an announcement made by the city’s finance bureau the civil servants will start to receive e-CNY as payment in May.

The recent 19b-4 approval of spot Ethereum exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) is putting pressure on South Korean financial regulators to revisit their policies on digital assets. The SEC's decision to allow ETFs for Ethereum, the world's second-largest cryptocurrency, on May 24, 2024, follows its earlier endorsement of Bitcoin ETFs in January 2024. This move is seen as a significant step in merging traditional finance with the digital asset sector.Photo by DrawKit Illustrations on UnsplashKorean regulatory cautionIn contrast to the progressive stance in the U.S., the Korean Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have maintained a cautious approach regarding the integration of crypto assets into traditional securities markets. According to current regulations under the Capital Markets Act, ETFs in Korea are limited to traditional underlying assets such as financial instruments, securities, international currencies and commodities. These foundations are crucial for the creation of financial derivatives, leaving little room for digital assets under current laws. Calls for regulatory reforms and market implicationsThe decision by the SEC is expected to influence the Korean regulators to update their views on digital assets, according to local media and industry experts. Jung Eui-jung, the head of the Korean Stockholders’ Alliance, has advocated for Korea to emulate the U.S. by approving Bitcoin and Ethereum ETFs. He expressed concerns that continued regulatory hesitance could lead to investor funds migrating to more progressive markets like the U.S., potentially positioning the U.S. to broaden its crypto market further. Xangle, a digital currency data provider in Seoul, has also criticized the current regulations as outdated, emphasizing the need for revisions to accommodate the increasing relevance of digital assets in global finance. 

CityLabs Secures 8.55% Stake in GopaxCityLabs, a company listed on the KOSDAQ stock exchange, has stepped in as a rescue investor for the South Korean cryptocurrency exchange Gopax.The company announced last Friday that it has acquired a total of 76,308 shares of Streami, the operator of Gopax, securing an 8.55% stake in the company. The investment amounts to a total value of KRW 5.4 billion (approximately $4 million).Photo by Precondo CA on UnsplashGopax’s turbulent historyGopax has recently been facing public and regulatory scrutiny due to its internal struggles, such as undergoing major changes in leadership earlier this year following its acquisition by Binance, with Lee Jun-haeng resigning and Binance’s Asia Pacific Head, Leon Sing Foong, taking over.After this event, Streami submitted reports to the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSS) in line with requirements to inform the regulatory body about such changes. However, due to delays in the FIU’s approval process likely influenced by Binance’s various legal and regulatory challenges, there was yet another leadership transition — Foong stepped down, and Lee Joong-hoon, Gopax’s former Vice President, took over. Notably, Foong recently left Binance altogether amid regulatory crackdowns.During this process, Gopax also struggled to make principal and interest payments on its own decentralized finance (DeFi) service, GOFi, in the wake of last year’s FTX collapse. The amount of customer funds locked in GOFi totals KRW 56.6 billion, according to an announcement made by Gopax in April. Binance acquired a stake in Gopax on the condition that it would inject enough capital into Gopax to repay this amount in full.CityLabs steps inAs a result, there have been speculations that a Korean company would invest in Gopax and deliver the exchange from its woes. Some even predicted that this company might become a major shareholder, although CityLabs has acquired only an 8.55% stake due to the fact that the funds required to do so far exceed CityLabs’ annual revenue.Last year, CityLabs reported a consolidated revenue of KRW 28.4 billion and an operating loss of KRW 6.1 billion. Although its revenue increased by 2% compared to the previous year, operating losses grew by 46.9%. While the company may not have sufficient funds at present to become a major shareholder, there lies the possibility that it may increase its stake in the future.The acquisition seems to be driven by CityLabs’ interest in blockchain businesses and the crypto market. While it currently specializes in intelligent transportation systems (ITS), it was formerly Dayli Blockchain, which was affiliated with the crypto exchange Coinone and Dayli Financial Group (now known as Gowid). In 2017, Yellow Mobile became the largest shareholder of Dayli Financial, and in February 2018, it became the largest shareholder of DailyBlockchain, making Dayli Blockchain its subsidiary. Coinone was also a subsidiary of Yellow Mobile at the time. All of these ownership relations have now been restructured.CityLabs has thus been involved in the blockchain industry for some time now with previous connections to cryptocurrency exchanges while also offering decentralized identity (DID) and blockchain as a service (BaaS) products. Observations point to the possibility that its history has influenced its decision to invest in Gopax.“We acquired shares to secure an entry point into the crypto market and position ourselves as a major player,” the company said in a statement.Meanwhile, financial authorities are considering plans to examine the eligibility of major shareholders when reviewing applications from crypto businesses.