NEOPIN and Finschia Foundation to jointly launch Finschia’s first decentralized exchange

South Korea’s benchmark stock index, the KOSPI, crossed the 5,000 mark for the first time on Jan. 22, sparking excitement across the market. With investor sentiment improving, the ruling Democratic Party of Korea (DPK) has floated the idea of using digital assets to help boost the KOSDAQ—Korea’s secondary stock market—toward the 3,000 level.Photo by Burak The Weekender on PexelsThe proposal was raised during a luncheon at the Blue House attended by DPK members and President Lee Jae-myung. During the meeting, DPK lawmaker Min Byeong-dug highlighted the role cryptocurrencies could play in expanding the KOSDAQ, according to the Maeil Business Newspaper. While the KOSPI is home to large, established firms with strict listing requirements, the KOSDAQ operates under looser standards and primarily lists small and medium-sized companies, including startups. Leveraging STOs and stablecoinsMin’s argument is that the KOSDAQ could grow further if these companies begin using digital asset tools such as security token offerings (STOs), won-pegged stablecoins, and other crypto-based products. The lawmaker also pushed back against the idea that traditional banks should be the principal force behind won-backed stablecoin initiatives—putting him at odds with the direction favored by the Bank of Korea. The Korean government and the DPK aim to finalize legislation covering won-pegged stablecoins by March, as debate continues over which entities should be allowed to issue them. Citing financial stability concerns, regulators have signaled that early issuance should be restricted to bank-led consortia in which lenders maintain a controlling stake. However, the push to frame digital assets as a new engine for market growth comes at a time when South Korea’s crypto trading activity has cooled sharply. Data from CoinGecko, cited by the Maeil Business Newspaper's Telegram channel, showed that combined daily trading volume across the country’s five largest exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—totaled 3.46 trillion won ($2.36 billion) on Jan. 18, down more than 80% from a year earlier. Average daily trading volume in January 2025 hovered near 10 trillion won ($6.8 billion), driven in part by optimism that Donald Trump’s return to the U.S. presidency would boost the market. Exactly a year later, that momentum has faded, with daily volume falling below five trillion won ($3.4 billion) and only briefly rising above that level on Jan. 6 and Jan. 14. The slowdown is also visible in pricing. Bitcoin, the world’s largest cryptocurrency, is currently trading at around $89,000, roughly 30% below its all-time high recorded on Oct. 7, 2025, and has fallen 6.58% over the past week. Investors demand utility as hype fadesRegardless of price fluctuations, the legislative push suggests an ongoing interest in treating digital assets as a functional layer of the financial system. For Min’s proposal to translate into real support for the stock market, however, the crypto products linked to KOSDAQ growth would need to prove clear practical value. That emphasis is echoed in investor sentiment. A recent weekly survey by CoinNess and Cratos of 2,000 Koreans found that the most common belief about what altcoin projects need to survive is real-world usefulness and the ability to generate revenue: 37.5% of respondents chose that option. Another 21.8% pointed to listings on major exchanges, while 20.2% cited the importance of a compelling narrative aligned with market trends. Meanwhile, 10.9% said a large community mattered most, and 9.6% said altcoins are unlikely to succeed under any circumstances. 

Hong Kong Enticing Crypto Firms from Mainland ChinaIn the wake of various scandals and high-profile bankruptcies, some governments have shunned the cryptocurrency industry, but Hong Kong is instead embracing mainland China crypto companies, urging them to relocate to the city in a bid to bolster its status as a financial hub.©Pexels/RODNAE ProductionsEmbracing cryptoAfter enduring an exodus of bankers amid a China security crackdown and stringent COVID curbs, Hong Kong is now making a concerted effort to revitalize its finance sector by embracing crypto. Top Hong Kong government officials, including Chief Executive John Lee, have voiced their support, and the city is planning to hold 100 crypto-related conferences and lavish parties throughout April. Hong Kong is “very serious about building an international virtual asset center,” said Xiao Feng, chairman of Hong Kong crypto exchange HashKey, which drew 13,000 people on the first day of its Hong Kong Web3 Festival, the most significant conference of the month.HashKey obtained a license to operate in Hong Kong last November, making it one of two licensed crypto exchanges in the city, alongside rival exchange OSL. Xiao told Reuters that many people in the crypto industry had initially assumed that Hong Kong would inevitably adopt the same regulations as mainland China. However, the government is now emphasizing that Hong Kong operates under the “One Country, Two Systems” framework and enforces distinct laws.SkepticsDespite this, many remain skeptical of Hong Kong’s promise of a stable regulatory regime on cryptocurrencies. One crypto venture capitalist, who spoke to Reuters on the condition of anonymity due to the sensitive nature of the matter, expressed concern over China’s crypto ban, which still looms large in the background. “If Hong Kong can suddenly claim to be crypto-friendly, that switch can be flipped off just as quickly should things become challenging,” he said.Crypto licensing interestNevertheless, at least 10 companies with Chinese founders, including OKX, Bybit, and Huobi, have announced or are planning to announce their bid for licenses in Hong Kong. These firms, which have exited countries like Canada and the UK, are among the sponsors of the most glamorous Hong Kong parties this week. Bybit held a private dinner for industry heavyweights, and OKX reserved a rooftop venue overlooking Victoria Harbour, where guests could enjoy a stunning view.At one event on Tuesday, Tron founder Justin Sun, addressed a mainly Chinese-speaking audience, stating, “I can’t believe that we are having such conferences on Chinese soil.” Sun has been charged with fraud by the US Securities and Exchange Commission (SEC), but he argued that the charges lacked merit and accused the regulator of targeting crypto players. “Hopefully, one day, we will have such events in Shanghai and Beijing,” he remarked.Despite the lingering concerns, Hong Kong is committed to establishing itself as a leading finance hub in the cryptocurrency industry and is sparing no effort to achieve its goals.

Bank of Japan Publishes Results of CBDC PoCThe Bank of Japan (BoJ) recently concluded the second phase of its central bank digital currency (CBDC) proof of concept (PoC) project, which began in April. The results of this phase were published on Monday, and they shed light on key aspects such as the comparison between account-based and token-based CBDCs and the management of holding limits for users with multiple accounts.Photo by Manuel Cosentino on UnsplashToken-based CBDCsThe experiments conducted by the central bank covered a wide range of topics. Among the most intriguing findings were the advantages and disadvantages of token-based CBDCs and how to effectively impose holding limits for users with multiple CBDC balances.Token-based CBDCs have garnered interest from various central banks, with some adopting the UTXO token model used by Bitcoin without the use of a distributed ledger. A UTXO or unspent transaction output, defines where a blockchain transaction starts and finishes. The Bank of Japan explored this model and analyzed its pros and cons.In the initial proof of concept, both account-based and token-based CBDCs were examined, considering scenarios where the central bank managed the ledger or shared it with intermediaries like banks. In the token-based model, fixed token denominations were used, similar to physical cash in countries like India, and a centralized ledger was employed. However, in the recent phase, the central bank utilized flexible value tokens similar to UTXO and shared ledger functions with intermediaries.The Bank of Japan favored the flexible value token model due to its ability to handle multiple requests simultaneously. However, it acknowledged that this model may require more technical resources compared to the account-based approach. Challenges may arise when implementing additional functions, such as holding limits, while maintaining optimal performance. The European Central Bank (ECB) also noted in a recent report that most payment providers are accustomed to account-based payments and would incur costs to adapt to token-based systems.Another significant aspect explored by the BoJ was how to impose holding limits when users have multiple CBDC balances through different intermediaries. The challenge lies in determining if the overall holding limit has been breached without compromising user privacy.Homomorphic encryptionOne possible solution discussed in the report is the use of homomorphic encryption, which enables computations to be performed on encrypted data without it first needing to be decrypted. That allows for the necessary checks without intermediaries accessing the specific data being checked. Although this solution may slightly increase processing time, it could introduce a higher risk of data inconsistencies.Alternatively, a simpler approach proposed by the central bank is to establish a per-account holding limit and a limit on the number of accounts a single user can hold, rather than imposing global limits. Ideally, users with multiple accounts would have a higher per-account holding limit compared to those with fewer accounts.Phase 3 underwayWith the next pilot phase already underway, the BoJ aims to test the end-to-end process flow and identify challenges related to integrating with external systems. Additionally, they are creating a CBDC Forum to gather input from the private sector, ensuring a collaborative approach to CBDC development.While investigation and research into CBDCs continues, the BoJ has said that it will make a final decision on CBDC implementation by 2026.