Hong Kong lawmaker suggests action on ETFs as asset managers explore potential

China Launches Digital Yuan ATMs in Hainan Resort City of SanyaThe latest in a long list of initiatives to bring about further use of China’s digital yuan has seen the introduction of e-CNY ATM machines within the resort city of Sanya on Hainan Island. That’s according to a recent report published by the South China Morning Post (SCMP).Photo by Monstera on PexelsInternational currency exchangeThe introduction of e-CNY foreign exchange machines aims to provide visitors with easy access to digital payments and enhance their experience in the local mobile payments ecosystem. Resembling traditional ATMs, these machines allow tourists to deposit 20 different currencies, including US dollars and euros, and receive a physical card loaded with e-CNY in return.The card can be used for seamless payments at participating merchants with a simple tap. Travelers can also use the machines to top up their e-CNY balance, check transaction records, and manage their funds.This initiative addresses the needs of tourists who often face challenges setting up Chinese mobile wallets, which have become essential for retail, dining, transportation, and shopping. These mobile wallets typically require real-name verification and a local bank account, posing difficulties for foreign visitors.While limited prepaid options have been available in recent years, the e-CNY card now offers a convenient digital payment solution without the need to download a separate app. The machines are currently available in two cities, with the Bank of China (BOC), one of 11 authorized banks for e-CNY, leading the development of these innovative devices.Earlier this year, BOC launched a similar foreign exchange machine at Yiwu International Trade City in Zhejiang province, emphasizing China’s efforts to promote digital currency and facilitate financial accessibility. Both Zhejiang and Hainan have been striving to become attractive destinations for foreign tourists and merchants. In May, administrators within the local government in Jiangsu Province confirmed that they would be launching an initiative to promote use of the digital currency within the local education system.The introduction of these machines aligns with Beijing’s mission to develop and promote its sovereign digital currency, known as the Digital Currency Electronic Payment (DCEP). The project, which began trials in 2019, aimed to enhance financial inclusion and digital finance accessibility for unbanked individuals.Digital yuan internationalizationChina has been actively pursuing the internationalization of the digital yuan, seeking to facilitate yuan-denominated trade and investment, while reducing reliance on the existing global financial system. In May, the BOC entered into a partnership with French financial services firm BNP Paribas that will see the company promote e-CNY to its corporate clients.China’s efforts to promote cross-border use of e-CNY extend to regions like Hong Kong, a key offshore yuan center. A trial of the e-CNY for cross-border payments took place last year, facilitating more than 150 million yuan ($22 million) of cross-border e-CNY transfers in 160 payments, involving 20 commercial banks in Hong Kong, Thailand, and the United Arab Emirates (UAE).As China continues to make inroads where adoption and use of the e-CNY are concerned, these developments signal a significant shift in the way we can expect sovereign currencies to be made available globally.

Korean Blockchain Startups to Showcase Products in KINTEX in NovemberSouth Korean blockchain startups are set to benefit from increased opportunities to participate in exhibitions organized by the Korea International Exhibition Center (KINTEX) in Ilsan, located northwest of Seoul, the nation’s capital.According to a report by local news outlet Dailian, KINTEX recently announced a collaboration with Onoffmix, a social gathering platform, with the aim of expanding exhibitions and bolstering the startup ecosystem.Under the newly signed agreement, KINTEX and Onoffmix will leverage the latter’s startup business network and event platform to encourage startups to take part in more than 20 exhibitions organized and hosted by KINTEX. Onoffmix, boasting a subscriber base of 1.45 million, will serve as a valuable resource in this partnership.Photo by Seungwon Lee on UnsplashGlobal trendThis move aligns with the global trend of increasing startup participation in exhibition shows. One notable example is the Consumer Electronics Show, a prominent annual tech trade show in the United States that features Eureka Park, an event for startups to showcase their products. With 1,340 startups participating this year, Eureka Park has been witnessing consistent growth in participation year after year.Another instance is 4 Years From Now (4YFN), the startup event held during the annual mobile tech show, Mobile World Congress. 4YFN offers opportunities for over 2,000 startups to connect with potential buyers and investors.Startup exhibition in NovemberIn line with this global shift, KINTEX and Onoffmix aim to assist local startups in exhibiting their cutting-edge technologies, establishing connections with industry experts and investors, and participating in conferences and pitching events. One of their first such endeavors is the Digital Media Tech Show (DMTS) scheduled for November. DMTS will showcase innovative products in various tech areas such as metaverses, non-fungible tokens (NFTs), and blockchain. In addition to the exhibition, conferences will be held to facilitate knowledge sharing among startups regarding industry trends, business ideas, and investment opportunities.Lyu Jaewon, the Chief Business Officer at KINTEX, said that this partnership will contribute to the convention center’s expansion of exhibitions and promotion of sustainable growth.Onoffmix CEO Yang Joon-cheol highlighted the company’s commitment to collaborating with KINTEX to expedite the growth of local startups and support their expansion into overseas markets.

Korean Crypto Expert Claims NFTs and Security Tokens Shouldn’t Be a Priority for Investors YetAlthough there has been a lot of speculation recently regarding the prospects of non-fungible tokens (NFTs) and security tokens as lucrative investment opportunities, these topics should not be of concern yet, said Kim Dong-hwan, CEO of Korean crypto consulting firm Wonder Frame, at Tuesday’s 2023 FNTimes Investment Forum hosted in Seoul by the Korean Financial Times.Photo by Markus Winkler on UnsplashFrom a price-to-earnings perspective, these types of investments should not be of priority to the average investor, Kim said, stating that this argument is rooted in historical context. Bitcoin, the kingpin of cryptocurrencies, had its first breakthrough in 2012 when its price was around $13. Since then, its value has skyrocketed nearly 2,000 times. Those who profited from Bitcoin then went on to invest in Ethereum, the second-largest cryptocurrency by market capitalization. Ultimately, the money earned from Bitcoin was constantly circulating in the crypto market.Grappling for liquidityHowever, Bitcoin’s liquidity — the frequency at which assets are bought and sold, which can be deemed the most important aspect of investing in and trading cryptocurrencies — is currently down. Liquidity in the crypto market usually flows in order from Bitcoin first, to altcoins, then to NFTs, Kim explained, because investments in NFTs are made by people who hold cryptocurrencies, not Korean won. Therefore, NFTs, which have now experienced more than a 90% decline from their peak, must depend on Bitcoin’s price recovery for their own resurgence.Securing liquidity for security tokens is also difficult, considering the fact that while these assets share common characteristics with cryptocurrencies, they are subject to strict regulatory oversight by financial authorities such as the Korea Exchange. Therein lies the difficulty in forecasting the prospects for security tokens.Kim thus questioned whether there would be market makers or liquidity providers that would be willing to boldly step into the role of satisfying the market, given the close scrutiny of authorities such as Korea’s Financial Services Commission (FSC) and Financial Supervisory Service (FSS). Although crypto exchanges like Upbit act as market makers by facilitating daily trading worth trillions of won, speculation suggests that securities firms that are responsible for supplying security token liquidity may find it challenging to do the same.Weak investments and negative perceptions of DeFiAnother concern for security tokens is fractional investments, which tend to be concentrated on assets of lower value. “Security tokens are fundamentally about dividing underlying assets and then selling them. However, in many cases, these underlying assets are of lower value or have no choice but to be traded this way,” Kim said.Kim also mentioned the regulatory hurdles hindering decentralized finance (DeFi) in general, despite its reputed appeal. “DeFi is perceived by international organizations like the Financial Stability Board (FSB), the US Federal Reserve System, and the European Union (EU) as a public enemy that causes financial instability in the real world,” he said.Taking all these factors into consideration, Kim recommended against investing in security tokens or NFTs at this time, given the current situation where even Bitcoin’s liquidity is at an all-time low. He suggested that, with market interest rates approaching 5%, unless there is a specific need to invest in virtual assets, it may be better to explore investment options positioned for higher interest rates.Kim is an industry expert who has previously written articles for crypto news site CoinDesk Korea for four years and has taken on the role of Chief Business Development Officer (CBDO) at Blitz Labs, a virtual asset research firm. He founded Wonder Frame in 2022, where he currently works as a professional consultant.