HashKey Capital and FTSE Russell introduce crypto index suite

Further Trials Required Before Determination of eHKD Launch DateThe Hong Kong Monetary Authority (HKMA) is taking a cautious approach to the launch of its retail central bank digital currency (CBDC), the e-HKD, stating that it will only go live once key stakeholders have gained sufficient experience to compete effectively in the payment sector.Photo by Jimmy Chan on PexelsAwaiting greater clarityIn an interview with the South China Morning Post (SCMP) earlier this week, Eddie Yue, CEO of the HKMA, revealed that initial experiments with e-HKD have shown promise, but the central bank is still waiting for greater clarity on technological, legal, and societal aspects. The CBDC trial began in May, involving 16 commercial banks, payment providers, and gross settlement platform Ripple, with a focus on exploring various use cases.Yue emphasized that they are still in the early stages of the trial process. The central question remains finding a use case that outperforms current retail payment methods in terms of safety, speed, or convenience.Programmable paymentsAmong the use cases explored in the pilot, programmable payments have stood out. This functionality allows consumer funds to be restricted for specific purposes. Bank of China (Hong Kong) has been at the forefront of this study, allowing select users to make payments using the test CBDC.The potential applications of the CBDC extend to tokenized deposits and tokenized assets, the aspect of the project which Ripple has involved itself with. The HKMA has shown interest in tokenization, especially after the successful completion of Project Evergreen, a blockchain-based bond issuance project.While the domestic use of the CBDC faces challenges, the HKMA is actively considering its role in cross-border payments. The HKMA has been involved in the Bank for International Settlements (BIS) mBridge pilot, which is expected to release a minimum viable product (MVP) by 2024. It’s working alongside the Bank of Thailand and the central bank of the United Arab Emirates (UAE) on that project. Hong Kong and the UAE have been working towards strengthening financial cooperation in respect of crypto regulation.Following the achievements of the initial pilot, the HKMA is open to bringing in new participants. Rumors suggest that up to 20 central banks are closely monitoring the project’s developments.Collaboration with mainland ChinaRecent weeks have seen Hong Kong and China working on improving cross-border transactions. In July, it was announced that Chinese tourists visiting Hong Kong would be able to use their digital yuan wallets to pay for goods and services at select locations.Conversely, Hong Kong tourists visiting mainland China could use the digital yuan for retail transactions. A new upgrade will enable tourists to top up their digital yuan wallets using Hong Kong’s Faster Payment System (FPS) or major payment providers like Mastercard and Visa.While the exact launch date for e-HKD remains uncertain, the focus on practical use cases and technological advancements is expected to yield a robust and innovative CBDC for Hong Kong’s future. On the international front, the mBridge project is set to play a pivotal role in the broader adoption of CBDCs across borders, potentially revolutionizing global payment systems.

Zodia Custody Expands Its Custodial Services to SingaporeDeveloping crypto business hub Singapore has added another player to its list of local crypto sector participants with the arrival of digital asset custodial services provider Zodia Custody.The London-headquartered institution-first digital asset custodian is setting up shop in Singapore. Zodia Custody is backed by Japan’s SBI Holdings, alongside prominent financial services firms Standard Chartered and Northern Trust. Through this move, outlined in an article published by CNBC on Monday, it’s now targeting financial institutions in Singapore for the digital asset custody services it offers to that cohort.Photo by Kin Pastor on PexelsWell-timed expansionIt’s understood that Zodia has ambitious growth plans relative to the Asia-Pacific (APAC) region. In May, the firm entered the Middle Eastern market, establishing a presence in Dubai. The firm’s timing is prescient relative to Singapore, as the custodian is responding via its Singapore expansion to an increasing demand coming from institutions seeking robust digital asset custodianship services.The expansion also coincides with the Monetary Authority of Singapore’s (MAS) recent efforts to foster a well-defined digital asset ecosystem. Of late, the MAS introduced a comprehensive framework that encompasses the use of digital currencies, including central bank digital currencies and stablecoins. Moreover, MAS has proposed draft legislation that outlines the safeguarding of digital assets, signaling the pivotal role custodial services are set to play in Singapore’s evolving digital asset landscape.The firm has established a specific local entity, Zodia Custody (Singapore) Pvt. Limited, appointing Kai Kano, the former Managing Director of rival digital assets custodian Bitgo, as the new company’s CEO.Speaking on the subject of the firm’s Singapore market entry, Julian Sawyer, the CEO of Zodia Custody, stated:“Singapore is no stranger to digital assets, having long been a hub for financial technology innovation. But even in a mature market, challenges remain. Having been created by Standard Chartered Ventures, we have a deep understanding of institutional needs and requirements not just to enter the space but thrive within it. As we engage with the local ecosystem, we’ll be providing market participants with cutting-edge technology, bank-level compliance, and governance to accelerate their digital asset adoption journeys.”Strategic partnershipsIn the past year, Zodia Custody has established strategic partnerships with industry leaders such as LMAX Digital, Hidden Road, BlockFills, and Blockdaemon. These collaborations are driven by Zodia’s market-leading Interchange offering, which equips institutions with enhanced risk management, secure custody, and solvency protection.The expansion into Singapore marks the latest milestone in Zodia Custody’s global growth strategy. Over the past year, the custodian has expanded into Japan through a joint venture with SBI Digital Asset Holdings and into Luxembourg, where it operates as a registered virtual asset service provider (VASP). This move into Singapore follows a successful US$36 million Series A fundraising round.Meanwhile, its sister company Zodia Markets, which is totally segregated from Zodia Custody, made the news in crypto circles earlier this month when it achieved in-principle approval in Abu Dhabi for a broker-dealer license.

Huobi Delists USDD Stablecoin PairsHuobi Global, the Seychelles-headquartered cryptocurrency exchange, has made the decision to delist ten trading pairs, primarily involving tokens used in transactions with the USDD stablecoin issued by the TRON DAO Reserve.That’s according to an announcement published to Huobi’s website on Monday. These tokens are supported by TRON founder Justin Sun, who also acts as an advisor to Huobi. The delisting, effective from June 29, will impact several tokens, including the Cardano blockchain token ADA, Solana’s SOL, ApeCoin’s native token APE, MATIC from Polygon, FIL from Filecoin, and ETC from Ethereum Classic.Photo by Napendra Singh on UnsplashUnregistered securitiesAll of these tokens were offered on the Houbi platform in pairs with USDD. Additionally, trading pairs involving ARPA, GAS, QTUM, and ZKS with Bitcoin will also be removed from the platform. Huobi stated that these changes are aimed at providing users with an improved trading experience.Originating from China, Huobi has played a significant role in spot and derivatives trading for digital assets. The decision to delist these tokens follows their classification as unregistered securities in recent lawsuits by the US Securities and Exchange Commission against Binance and Coinbase. Prior to Huobi, Robinhood and eToro had already removed some of these tokens from their platforms.Stablecoins are designed to maintain a stable value by pegging them to less volatile assets like the US dollar. They achieve this by holding equivalent reserves of cash and cash-equivalent assets as collateral. Stablecoins are widely used by traders for transferring funds between exchanges and as a hedge against price volatility. This makes them some of the most heavily-traded tokens in the crypto space.USDD stabilityUSDD, the stablecoin at the center of this delisting, currently ranks as the eighth largest stablecoin by market capitalization, with approximately $750 million. Huobi is the primary exchange for buying and trading USDD, according to CoinGecko, a crypto market data provider. USDD is backed by various digital assets such as Bitcoin, Ether, and TRX, and it is issued by the TRON DAO Reserve. The TRON DAO Reserve operates as a decentralized autonomous organization (DAO), utilizing blockchain technology to automate voting and transaction processes.USDD is an algorithmic stablecoin, with the assets held in backing the coin over-collateralized to a level of 170%. Despite this, the stablecoin has had issues in maintaining its US dollar peg from time to time. The issue has been that the token is partly backed by the TRX token, the native token of the TRON ecosystem. If TRX backing is discounted, the stablecoin is only 49% backed.Reports indicate that Sun acquired a controlling stake in Huobi through a Hong Kong-based asset manager, reportedly paying around $1 billion in November. However, Sun hasn’t provided any details of any such ownership stake.Huobi’s decision to delist these trading pairs reflects the evolving regulatory landscape and the need for exchanges to ensure compliance with securities regulations. By removing tokens that have faced legal scrutiny, Huobi aims to maintain a robust and compliant trading environment for its users.