Hong Kong Reiterates Web3 Credentials and Commitment

RaonSecure to Develop Digital Identity Strategy for the Indonesian GovernmentRaonSecure, a South Korea-based decentralized identity (DID) service provider utilizing blockchain technology, has secured a contract with the Korea-Indonesia e-Government Cooperation Center. The contract involves providing consultation services aimed at devising a strategy for the implementation of a digital identity system in Indonesia. The selection of RaonSecure as the contract winner was orchestrated by Korea’s National Information Society Agency (NIA), and this strategic venture is being executed through the bilateral center.Photo by Ben Sweet on UnsplashBilateral center fostering tech exchangeEstablished in Jakarta in 2016, the bilateral center aims to facilitate the exchange of technological expertise between the Korean government and its Indonesian counterpart. This organization also serves to accelerate the entry of Korean enterprises into the Southeast Asian market.Indonesia’s national service portalAs the Indonesian government looks forward to establishing a national service portal, the need for a robust national digital identity system has been growing. This system is envisaged to support functionalities such as user authentication, e-signatures, and privacy protection.Blockchain-based DID implementationIn light of these needs, RaonSecure has emerged as a suitable company for the project, showcasing its technological prowess and stability. The Korean tech firm’s expertise has been evident in the successful deployment of its blockchain-powered DID platform, OmniOne, across diverse organizational settings. Noteworthy deployments include providing OmniOne for the issuance of identification cards to government employees, licensed drivers, and military veterans. Furthermore, RaonSecure has recently partnered with the Korea Federation of Savings Banks (KFSB) to develop a solution that verifies bank customers’ identities using mobile ID cards.The Indonesian venture is encouraging development for RaonSecure as it will serve as a gateway to not only fostering its presence within Southeast Asia but also propelling its reach far beyond, and the company’s blockchain DID technology will play a key role in spearheading this expansion into new horizons.

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.

Survey Reveals 45.9% of Korean Crypto Investors Reporting LossesAccording to a recent survey, more than half of South Korean adults have experience of owning cryptocurrency. Most of them bought crypto for investment purposes, with 33% of respondents making gains and 45.9% losing money.Photo by RDNE Stock project on Pexels2,500 respondentsThe Korea Financial Consumers Protection Foundation, a public research and education institute, conducted an online survey to assess the prevalence and trends of cryptocurrency ownership among South Koreans. The study, conducted between March 3 and March 24, 2023, encompassed 2,500 participants between the ages of 20 and 69 residing in Seoul, its suburbs, and the six major metropolitan areas. The results shed light on the crypto landscape, including ownership patterns, investment purposes, asset holdings, funding sources, and the future intentions of respondents.Crypto ownership trendsAccording to the survey, 30% of the participants currently own cryptocurrency, while 23% revealed they had previously owned crypto assets but no longer possess them, indicating that more than half of the respondents have had exposure to cryptocurrencies at some point in their lives.Among current crypto holders, 74.5% stated that they had acquired their first digital assets between 2020 and 2022, which suggests a surge in crypto purchases during the COVID pandemic period.Purpose of holding cryptoRegarding the purpose of holding crypto, 80.9% of respondents who either currently own or have previous experience owning cryptocurrency (representing approximately 43% of all participants) cited investment as their primary motivation. Furthermore, 17.4% viewed crypto as a trading instrument, while 17.8% held it for specific service utilization. (Individuals were allowed to choose multiple options.) From this result, the authors estimated that around 24.2% of all respondents currently hold crypto for investment purposes.The survey revealed the distribution of virtual asset holdings among respondents, with the values quoted in Korean Won (KRW). Among the participants, 21.5% owned less than 1 million KRW ($760), while 45.8% held more than 1 million KRW ($760) but less than 10 million KRW ($7,600). Additionally, 28.8% possessed between 10 million KRW ($7,600) and 100 million KRW ($76,000), and 3.9% held more than 100 million KRW ($76,000) in crypto assets.Funding sourcesWhen asked about the sources of funds used to purchase virtual assets, 82.5% of individuals with previous crypto ownership experiences mentioned utilizing spare funds from deposits or other sources. Meanwhile, 17.7% disclosed that they had liquidated other assets, such as stocks or real estate, to invest in cryptocurrencies. (Individuals were allowed to choose multiple options.) In addition, 7.8% of respondents acknowledged borrowing from acquaintances, with a higher rate of 11.8% among those in their 20s. The proportion of respondents who borrowed from loans was 6.2%.Among those who borrowed funds to invest in crypto, 47.6% are currently facing difficulties in repaying their loans, while 28.6% experienced repayment challenges in the past. This data suggests that a significant portion of individuals who borrowed to purchase cryptocurrencies encounter difficulties in loan repayment.Regarding the financial institutions from which respondents borrowed, 57.1% borrowed from the banking sector, while the remaining 42.9% obtained funds from non-banking entities. Encouragingly, no respondents reported borrowing from loan sharks.Cumulative returnsRegarding the cumulative returns on crypto assets, 33% of respondents who currently hold crypto reported gains, with an average cumulative return of 25%. Conversely, 45.9% reported losses, experiencing an average cumulative loss of 41.5%.When liquidating their crypto assets, 24.7% of traders made a profit, while 47.9% incurred losses. The data reveals that the proportion of individuals who suffered losses in their crypto investments was nearly twice as high as those who reported gains. Furthermore, higher age groups exhibited a higher percentage of losses compared to younger respondents. Among those who profited, the average return was 38.4%, while those who suffered losses reported an average loss of 37.5%.Future intentionsThe survey also inquired about the future intentions of respondents regarding their crypto holdings. Among current crypto holders, 80.8% expressed their intention to continue holding crypto assets. On the other hand, among those who do not currently own any crypto assets, 72.8% stated that they do not plan to purchase cryptocurrencies in the future.