South Korean FSC updates definition of virtual assets and VASP regulations for Virtual Asset User…

Japanese blockchain infrastructure firm Soramitsu has been contracted by the State Bank of Pakistan (SBP) to work on a pilot program for the digital Pakistani rupee. Pakistan originally announced its intention to pursue a central bank digital currency (CBDC) or digital rupee back in 2019. However, unlike other Asian nations such as China, Cambodia and Thailand, it has not taken much action to progress such a digital currency since then.SBP Governor Jameel Ahmad spoke at the Reuters NEXT Asia Summit in Singapore last month, outlining that the South Asian country was moving towards the establishment of a digital rupee and “building up [its] capacity” to launch it, and that a pilot project would be the next step. According to a report published by Nikkei Asia on Aug. 12, that pilot project is now underway.Photo by Hamid Roshaan on UnsplashCBDC specialistSoramitsu already has a wealth of experience in this field. In 2023, it signed a memorandum of understanding with the Laotian central bank to launch a proof-of-concept CBDC project, with the Tokyo-headquartered company going on to play a pivotal role in the issuance of Laos’ Digital Lao Kip.In Cambodia, it partnered with the National Bank of Cambodia to bring about the establishment of Bakong, Cambodia’s CBDC-like payment system. The company is also involved in CBDC projects in Papua New Guinea and the Solomon Islands, while spearheading a project aimed at enabling seamless cross-border payments among Asian countries. Japanese fundingIn the case of Pakistan’s pilot project, Soramitsu’s CBDC platform will facilitate the digital rupee while funding is being provided by the Global South Future-Oriented Co-Creation Project, an initiative from Japan’s Ministry of Economy that seeks to promote the formation of co-creation business models. Infrastructure, such as the internet and power, can be unstable in some parts of Pakistan. Consequently, the proposed CBDC will incorporate the ability for the user to transact with it using their smartphone, even if the phone doesn’t have an active internet connection. Digital transformationMasato Toriya, an associate professor at Tokyo University of Foreign Studies and an expert on Pakistan, outlined the behavioral change that would be required in getting Pakistanis in rural areas to use such a currency. He stated: “Many transactions in rural areas are cash-based, even for wage payments, and the rate of people with bank accounts is low."  However, cash-based systems have significant overheads, and it's thought that a CBDC could reduce such costs considerably. Last month, the Pakistan Institute of Development Economics published an article written by Dr. Ahmed Fraz, an assistant professor of finance with the organization, in which he claimed that the digital rupee pilot project is part of a “profound digital transformation” that Pakistan is moving towards.  Dr. Fraz asserted that a CBDC would enhance financial inclusion in Pakistan through the reduction of transaction fees, digitization of welfare payments and the financial inclusion of millions of unbanked citizens within the formal economy.He added that the digital rupee “is not intended to replace existing payment systems immediately but to complement platforms” and to modernize Pakistan’s financial architecture.

Japan’s Premier Says the Country is Committed to Fostering Web3Japanese Prime Minister Fumio Kishida, in a keynote address at the WebX conference in Tokyo, emphasized Japan’s commitment to fostering the Web3 industry and its potential to revolutionize the internet and catalyze societal change.During his address, Kishida underscored the transformative impact of Web3, envisioning it as a catalyst for innovation across various industries. He expressed his hope for the Web3 sector to regain attention and vitality, fostering the birth of numerous novel projects.EOS Foundation CEO Yves La Rose, present at the conference, noted the Prime Minister’s encouraging words and highlighted the welcoming attitude Japan is cultivating towards Web3 in the Asian region.Photo by Bastian Riccardi on UnsplashRegulatory progressKishida went on to describe Web3 as part of “the new form of capitalism,” recognizing its potential to drive economic growth while addressing social issues. Koichi Hagiuda, Japan’s Liberal Democratic Party’s Policy Research Council chairman, added that the country is diligently working to establish a robust regulatory framework to safeguard investors, providing a foundation for further Web3 policies.Japan has proven to be ahead of the curve already on workable regulation when it comes to digital assets by comparison with most of its international peers. Last month, the local regulator, the Financial Services Authority (FSA), announced that it was participating in Singapore’s “Project Guardian,” an initiative by the Singaporean regulator to explore the potential of digital assets.The country has found itself with a more progressive regulatory policy in place as a direct response to the collapse of the Mt.Gox crypto exchange in 2014. For that reason, FTX Japan had to safeguard client funds and is in a position to look towards restarting the business.Hagiuda also pointed to the significance of initiatives like “Start Next Innovator,” a project by Japan’s Economy, Trade and Industry Ministry that aims to send 1,000 entrepreneurs and students to Silicon Valley over five years to foster Web3 startups.Japanese launch imminent for BinanceThe event, which was initially reported on by local media on Tuesday, coincided with a significant announcement from Binance CEO Changpeng Zhao, revealing the imminent launch of the cryptocurrency exchange’s services on a new Japanese platform in August 2023.Binance, in its bid to enter the Japanese market, confirmed its plan to offer cryptocurrency services to Japanese users starting in August. The exchange had acquired the local platform Sakura Exchange Bitcoin (SEBC) in November 2022, which paved the way for its reentry into the country.Binance’s CEO, Changpeng Zhao (CZ), virtually addressed the WebX conference, praising Japan’s innovative approach to the Web3 sector and recognizing it as a leading country in terms of Web3 regulatory environment. He fondly recalled his own experiences living in Japan during the early stages of his career as a developer, emphasizing the clarity of Japan’s regulatory boundaries towards cryptocurrencies and stablecoins since 2017.The Web3 industry in Japan witnessed a flurry of headlines in June 2023, with the national tax agency revising legislation to exempt token issuers from paying corporate taxes on unrealized cryptocurrency gains.Prime Minister Kishida’s affirmation of Japan’s commitment to Web3 and Binance’s planned launch in the country reflect the growing interest and enthusiasm surrounding the Web3 sector in the Asian nation.

China's Ministry of Industry and Information Technology (MIIT) has stepped into the realm of the metaverse by forming a working group tasked with setting standards for the burgeoning technology.Photo by Li Yang on UnsplashChinese corporate participationThe announcement, made on Friday, revealed that the working group would comprise representatives from the government, academic institutions and major corporations. In its statement, MIIT explained that the establishment of the metaverse working group aligns with the nation's emphasis on industrial development within the technology sector. Notably, the group will feature key figures from major Chinese tech corporations, including Huawei, Ant Group, ZET, Tencent, Baidu, NetEase, Sense Time and others. Public feedback on the selection of group members is invited until Feb. 18, although the specific areas of focus for the group are not detailed in the document. Initial in-roadsThe working group’s headline tech participants have all made some initial in-roads into metaverse technology. Baidu established its own metaverse project, XiRang, in 2021. Late last year it partnered with Qualcomm on the use of extended reality (XR) technology for use on a new metaverse platform. Huawei is paying attention to the promising metaverse space by building up a catalog of metaverse-related patents. Like Baidu, Tencent is focusing on developing XR technology with metaverse development in mind. Last year NetEase collaborated with a Chinese liquor brand to launch a winery-themed metaverse, while issuing NFTs linked to liquor bottles. Establishing metaverse standardsChina has been contemplating the formulation of metaverse standards for some time. In September 2023, MIIT advocated for the creation of a dedicated working group to address the ongoing challenges in metaverse technology. The government's overarching objective is to ensure the healthy and orderly development of the metaverse industry through standardization and guidance, reducing redundant investment costs and fostering collaborative forces for industrial development. Analysts from JPMorgan foresee a potential uptick in the value of Chinese tech stocks if the metaverse gains traction in the country. According to their analysis, Chinese web giants like Tencent and NetEase stand to benefit significantly from metaverse development. Even non-web companies such as China Mobile, Sony and Agora could witness positive impacts should the technology gain widespread adoption. In fact, China Mobile led the development of a metaverse industry alliance in China in 2023. Regional developmentIn a December document, MIIT outlined plans to formulate strategy documents clarifying the development path of Web3.Last year, several local governments in China committed to the development of the metaverse industry. Sichuan, a province once known as a crypto mining hub, aims to reach a market size of 250 billion yuan ($35.1 billion) in the metaverse industry by 2025. Last May, the city of Zhengzhou announced policy proposals to support metaverse companies. The same month, the province of Henan established a $21.7 million fund to support metaverse-related projects. The following month, an initiative was established in Nanjing to nurture metaverse development. Additionally, Shandong province has plans to grow its metaverse-related initiatives to achieve a market size of 150 billion yuan by 2025.