Swoo Pay partners with Mastercard to target Southeast Asian market

As the South Korean capital market eyes the burgeoning potential of security token offering (STO) businesses, Koscom, a financial IT company, is increasingly coming into focus among securities firms for its dedicated STO platform. With four securities companies already in partnership, Koscom is actively seeking to expand its collaboration network further. Koscom is a technology subsidiary of Korea Exchange, the country’s only securities exchange operator.More partnerships with securities firmsAccording to its press release published a few weeks ago, Koscom inked a memorandum of understanding (MOU) with Yuanta Securities Korea, the South Korean branch of the Taiwanese retail broker. Through the partnership, the two entities pledged to collaborate on developing blockchain platforms and discovering new STO projects.  The MOU between Koscom and Yuanta is the fourth STO-related partnership Koscom has inked with a securities company. Koscom's other three brokerage partners are Kiwoom Securities, Daishin Securities and IBK Securities. With over four decades of experience in managing ledgers for brokerages, Koscom is highly skilled in constructing technical infrastructure for the capital market. As the operator of its own blockchain platform, this fintech company has been developing blockchain technology and acquiring relevant expertise.Photo by Shubham Dhage on UnsplashSecurity token issuance and distributionThe necessity for blockchain-based STO platforms provided by companies like Koscom for brokerages stems from regulations set forth by the Korean financial authority. The Financial Services Commission (FSC) mandates that the issuance and distribution of security tokens must be carried out by separate entities. This regulatory framework necessitates a platform that enables securities firms to connect and interact with each other. Koscom offers a joint STO platform designed to streamline transactions between brokerages, improving cost-effectiveness. In light of this, the financial IT company concentrates on developing such platforms with the aim of laying a solid foundation for the emerging STO market. According to local media outlet Etnews, Koscom has set its sights on completing the platform development within the first quarter, with plans to address additional requirements from brokerages subsequently. Striving to expand its network of partnerships to include companies both large and small, Koscom recognizes that a more diverse array of participating firms can enhance the efficiency of token issuance and distribution, which would in turn accelerate the adoption of STOs. Koscom’s strategy offers its partners an opportunity to test its STO infrastructure before the relevant legislation governing the management of security tokens is passed at the National Assembly. Regarding this development, Kim Sung-hwan, Head of the Digital Business Division at Koscom, said, “Koscom’s joint STO platform is emerging as an alternative method for brokerage firms to venture into the security token business. Factors such as costs and workforce requirements have made it difficult for many firms to proceed independently.” He added, “We will provide full technical support for our platform users, allowing them to focus on identifying reliable underlying assets for security tokens.” 

SC Ventures and Deutsche Bank Execute Stablecoin Payments via UDPNSC Ventures, the Singaporean disruptive technology investment subsidiary of UK banking conglomerate Standard Chartered, has partnered with Deutsche Bank in completing the first successful proof of concept (PoC) for the Universal Digital Payments Network (UDPN).Photo by Conny Schneider on UnsplashConnecting blockchain networks with CBDCsThe UDPN is a brainchild of Hong Kong’s Red Date Technology, which in turn is a co-founder of the Chinese Blockchain-Based Service Network (BSN). The PoC was aimed at facilitating seamless connections between central bank digital currencies (CBDCs) and various blockchain networks through message-based transactions.News of the successful PoC emerged via a report by India’s English-language business newspaper Financial Express earlier this week. In conventional finance and international payments, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) is the foremost, dominant financial messaging service. Notably, UDPN distinguishes itself from SWIFT as it operates on a permissioned blockchain, ensuring heightened security and regulatory compliance.As part of the PoC, several real-time transfers and swaps of synthetic USDC and EURS (Stasis Euro stablecoin) were executed between the two banks. While SC Ventures utilized code that leveraged UDPN software development kits (SDKs) and APIs, Deutsche Bank employed a graphical user interface. Rafael Otero, CTO and CPO of Deutsche Bank’s Corporate Bank division, emphasized the significance of this trial, stating that it provides an opportunity to explore how clients can actively engage in the decentralized global economy. Otero sees this as the logical next step in the evolution of financial transactions.Overcoming digital currency adoption challengesUDPN has been under development in collaboration with consultancy firm GFT Technologies and DLA Piper’s Hong Kong-based digital asset creation platform, TOKO, with further governance provided by the UDPN Alliance.The primary goal of UDPN is to overcome the hurdles that hinder the broader adoption of digital currencies, especially in the face of the surging number of CBDCs, stablecoins, and deposit tokens. The lack of interoperability among these digital assets necessitates innovative solutions.Currently, interoperability among stablecoins primarily relies on centralized cryptocurrency exchanges. However, due to the absence of proper oversight and regulatory framework in these exchanges, this method is not a sustainable solution for achieving interoperability between CBDCs and deposit tokens.UDPN takes a unique approach by providing a decentralized identity infrastructure. The actual currency transactions occur on their respective native blockchains or infrastructures. This means that UDPN enables users to seamlessly swap a USDC stablecoin on one network for a Euro stablecoin on another or even a bank deposit token.Improving upon financial messaging systemsAs UDPN incorporates an element of financial messaging for digital currencies, this hybrid approach streamlines transactions, eliminates the need for reconciliations, and enables atomic settlement. Therefore, UDPN ensures that either both sides of a transaction succeed or both fail. In contrast, purely messaging-based systems can result in one side of the transaction failing.SWIFT recently experimented with a messaging solution to connect CBDCs, and other conventional integration methods are being explored, involving APIs and routing networks, such as finP2P. It has collaborated with the central banks of Hong Kong and Kazakhstan recently in testing CBDC connectors.A report by Nikkei Asia last week suggested that Standard Chartered is venturing further into the world of digital currencies, particularly so in Asia, via SC Ventures.

Fueled by a crypto rally and higher overseas stock balances, South Korea’s National Tax Service (NTS) reported a sharp jump in disclosures of offshore accounts. On Aug. 26, the agency said 6,858 taxpayers declared overseas financial accounts this year, with a combined balance of 94.5 trillion won ($67.6 billion), up 38.3% in filers and 45.6% (29.6 trillion won or $21.2 billion) in value from last year.Photo by Piotr Łaskawski on UnsplashCrypto gains drive offshore filingsWithin that, reports of overseas bank deposits and cryptocurrency accounts rose to 46.4 trillion won ($33.2 billion) this year, more than 12% above 2024. That figure excludes stock accounts, which alone totaled 48.1 trillion won ($34.4 billion). Tax officials attributed the increase largely to the surge in crypto prices and higher balances in overseas stock holdings. The trend is underscored by CoinMarketCap data: the crypto market cap now stands roughly at $3.87 trillion, up 86% from $2.08 trillion a year ago. By asset type, the largest share of filers reported overseas bank deposits (3,197 people), followed by cryptocurrency (2,320) and stocks (1,992). By value, stock accounts dominated with 48.1 trillion won ($34.4 billion), compared with 23.5 trillion won ($16.8 billion) in bank deposits and 11.1 trillion won ($7.94 billion) in cryptocurrencies. Korean law requires residents and domestic corporations to disclose foreign financial accounts if their combined balance exceeds 500 million won ($358,000) on any month-end date during the year. Reports must be filed with the local tax office by June of the following year. The NTS said it will step up enforcement against suspected non-filers, using cross-border information-exchange data to verify offshore holdings. Penalties will include administrative fines, penalty notices, criminal referrals, public naming of violators and the collection of back taxes. The agency added that it is preparing to share crypto transaction data under the OECD’s Crypto-Asset Reporting Framework (CARF) and urged anyone subject to the rules to promptly file amended or late reports for overseas crypto accounts. The recent bullish sentiment in crypto, which fueled the uptick in foreign financial disclosures, has also been driving public interest in digital assets and boosting expectations for altcoins. A survey by CoinNess and Kratos conducted between Aug. 18 and 22 with 2,000 respondents found that 38.5% expect a limited bull run in a handful of altcoins, either with strong real-world use cases or serving as the underlying assets of launched ETFs. Another 28.5% predicted gains would remain centered on Bitcoin and Ethereum, while 20.7% anticipated a broader altcoin season reminiscent of past cycles. The remaining 12.3% forecast the end of the rally and the start of a downturn. Won stablecoins: policy and risksPolicy momentum around stablecoins is also picking up in South Korea. The Financial Services Commission (FSC) plans to introduce a bill in October governing won-pegged stablecoins as part of the second phase of the Virtual Asset User Protection Act. The legislation is expected to set rules for issuance, collateral management and internal controls. Amid these changes, companies are showing growing interest in launching won-based stablecoins. Kaia, an EVM-compatible, layer-1 blockchain, recently signed a memorandum of understanding (MOU) with blockchain solutions provider Open Asset to collaborate on projects tied to Korean won–backed stablecoins. The partnership will focus on issuance, distribution, service launches and developing practical use cases. Circle President Heath Tarbert has recently joined calls for a won-backed stablecoin. In an interview with The Korea Economic Daily, he underscored South Korea’s world-class payments infrastructure and said a digital won could help the country play a leading role in blockchain finance. Blockchain transactions, he noted, operate differently from traditional payment rails, making some form of digital currency, whether a stablecoin or a central bank digital currency (CBDC), a necessity. Meanwhile, at a recent meeting with top executives from the country’s four major financial groups, Tarbert ruled out collaborations on won-denominated stablecoins. Instead, he promoted Circle’s dollar-pegged stablecoins and suggested exploring joint initiatives centered around them. Not everyone sees stablecoins as a net positive. NICE Investors Service, a local credit rating agency, warned in a recent report that if banks issue won-based stablecoins, their interest income could suffer. The agency said adoption would likely weigh on banks, benefit securities firms and leave credit card companies largely unaffected. It added that a large shift of funds into stablecoins could shrink banks’ deposit base and weaken their intermediary role. Still, banks that issue stablecoins directly could soften the blow by tapping new fee-based revenue streams.