Hong Kong regulator unveils stablecoin sandbox

First ever cross-border settlement achieved for gold using e-CNYThe first ever cross-border settlement for precious metals using China’s central bank digital currency (CBDC), the digital yuan or e-CNY, has been successfully completed.Photo by Jingming Pan on UnsplashA year of e-CNY firstsIn October, Chinese state-owned media reported that the Shanghai Petroleum and Natural Gas Exchange (SHPGX) had been the venue for the first ever significant settlement of an oil contract using the e-CNY. Running along a commodities theme, on Wednesday a similar transaction was carried out once again with Shanghai being the venue, relative to the purchase of gold.A transaction valued at 100 million yuan ($14 million) was facilitated by the Bank of China’s Shanghai branch through the Shanghai Financial Exchange International Board. That’s according to reports from local Chinese media outlets.The Bank of China’s Shanghai branch, a key participant in the ongoing e-CNY pilot testing, orchestrated the transfer of e-CNY CBDC settlement received from overseas for the purchase of the gold. A spokesperson for the Bank of China highlighted the strategic significance of the transaction, stating:“The account will contribute financial strength to support Shanghai’s in-depth implementation of the free trade pilot zone promotion strategy and promote the quality and upgrading of the international trade center.”Oil, gold and iron oreThis achievement follows on from the Bank of China’s Hong Kong affiliate Bank of China (Hong Kong) (BOCHK) facilitating the import of iron ore to China through the e-CNY just last week. As part of that pilot trial, Baosteel Group, a customer of the Bank of China, purchased iron ore from Bao-Trans Enterprises.Further expanding its international partnerships, China signed a $400 million memorandum on CBDC cooperation with the United Arab Emirates on Dec. 1. The move underscores China’s commitment to fostering collaboration in the development and implementation of CBDCs on a global scale.Partnering with foreign banksThe Bank of China is actively collaborating with foreign institutions, including France’s BNP Paribas, to advance the development of the digital yuan CBDC.In July, Singaporean bank DBS Bank launched an e-CNY product for mainland China-based customers. Amid relentless moves to further the use of the digital currency, British banking giant Standard Chartered joined the advanced stages of pilot trials of the CBDC in November.Chinese President Xi Jinping, recognizing the pivotal role of CBDCs in cross-border trade, emphasized their importance during an address to the July 2023 Shanghai Cooperation Organisation (SCO) Summit. Subsequently, foreign banks have joined China’s ongoing CBDC trials, and Singapore announced its decision to allow Chinese tourists to utilize e-CNY for transactions within Singapore.In a related development, the official e-CNY app received an update on Tuesday. The latest version allows users to create an e-CNY wallet using their phone number, provides options to disable the wallet in case of phone loss and enables the resetting of passwords and private keys. Users can also link their personal bank accounts and debit cards to the e-CNY wallet for seamless in-wallet purchases.

Klaytn Foundation partners with CoinMarketCap to support Web3 startups and developersThe Klaytn Foundation, South Korean conglomerate Kakao’s Layer 1 public blockchain, announced on Monday (local time) that it has been selected to be one of the official partners of CoinMarketCap Labs (CMC Labs), a Web3 startup accelerator program operated by the crypto information platform CoinMarketCap.Photo by Shubham Dhage on UnsplashEmpowering buildersThe CMC Labs program offers builders an array of benefits that serve to promote their projects, boost discoverability, communicate with users, and more. This includes the “Learn and Earn” campaign, where startup owners can attract users through a system that distributes token rewards after engaging in educational content. The Airdrop Campaign, on the other hand, helps participants keep up to date on a startup project’s important developments, such as price movements. Startups can also promote their projects through a long-form article or YouTube video published on the CMC Deep Dive platform.Fostering the growth of dAppsCoinMarketCap, in turn, has agreed to be a partner in the Ignite On Klaytn (IOK) Program — a program run by the Klaytn Foundation to support promising developers both in Korea and abroad in their endeavors to bring their decentralized apps (dApps) to the Web3 market, thus cultivating the Klaytn ecosystem. Developers stand to benefit because they can concentrate their efforts on product development, while the program provides support for other crucial aspects like wallets, API nodes and development outsourcing.Through this latest collaboration with CoinMarketCap, the Klaytn Foundation plans to assist various projects in their entry into the global market. It also aims to play a bridging role, enabling more projects within the Klaytn ecosystem to participate in the CMC Labs program.“We are looking forward to the mutual participation of Klaytn Foundation and CoinMarketCap in our respective programs, which is expected to provide momentum to Klaytn’s ongoing efforts to expand its reach into Asia and global markets,” explained Seo Sang-min, Representative Director at the Klaytn Foundation.

Vauld Implements Key Leadership Changes Amid Bankruptcy ProceedingsFailed Singaporean cryptocurrency lender Vauld has unveiled a comprehensive overhaul of its board structure.Photo by Yibei Geng on UnsplashOngoing restructuringThe platform, which faced financial turmoil leading to its declaration of bankruptcy last year, is introducing fresh leadership to spearhead its restructuring efforts. The move involves the appointment of a new CEO, a creditor representative, and a scheme manager.The current CEO and Co-Founder of Vauld, Darshan Bathija, announced the proposed changes via a post on X (formerly Twitter) on Thursday. He emphasized that the new appointees would take charge of orchestrating a much-needed bailout.The challenges faced by the company through its ongoing bankruptcy proceedings have prompted Vauld to secure court approval for this new organizational scheme. In his social media post, Bathija stated:“Vauld (Defi Payments Pte Ltd) got its scheme of arrangement passed in Singapore courts. As part of the scheme, the current board will be replaced with a new CEO, a creditor representative, and a scheme manager.” Additionally, Bathija noted that the exchange’s customers are actively updating their Know Your Customer (KYC) details.This announcement comes almost a year after Vauld came under scrutiny due to a money laundering investigation. The cloud of suspicion surrounding the firm at the time led to the freezing of assets worth $46.4 million from its domestic operations by Indian authorities.Nexo acquisition failureIn February of this year, the Singapore High Court granted Vauld an extension until March 24 to formulate a comprehensive strategy for repaying its creditors. The extension became crucial after a potential acquisition deal with Nexo fell through. However, despite this reprieve, the exchange was unable to secure a further extension, fueling discussions within the community about the challenge of meeting creditor obligations within a relatively short time frame.In a step to facilitate the resolution of outstanding amounts, the court established a committee of creditors (CoC). This move was prompted by allegations from a faction of creditors that Vauld was impeding communication and implementing unwarranted corrective measures. Notably, the exchange owes more than $2.2 million to these creditors.Vauld has contracted the services of risk and financial advisory firm Kroll as part of the restructuring efforts. In an isolated instance of good fortune, it appears that Vauld creditors are unaffected by a data breach which occurred recently at Kroll, while creditors of the Genesis, FTX, and BlockFi crypto bankruptcy processes have had their data compromised.Charting a path forwardBathija conveyed that more updates regarding the platform’s path forward would follow soon. Vauld’s financial instability can be attributed to several factors, chief among them being the ripple effect of Terra’s downfall. Further complications arose due to economic issues tied to the Celsius Network and Three Arrows Capital (3AC) defaulting on their loans. These cumulative challenges led to Vauld’s operational suspension.Despite this failure and similar issues relative to crypto lender Hodlnaut and 3AC, which were also based in the city state, Singapore continues as a jurisdiction that effectively balances regulatory control with the drive to foster innovation. Its central bank and financial regulator, the Monetary Authority of Singapore (MAS), recently unveiled a comprehensive framework for stablecoins.