Liminal expands into Middle East via Abu Dhabi approval

Singapore Gets with Banks to Provide Guidance on Crypto BusinessesIn a move to provide clarity and guidance to financial institutions dealing with cryptocurrencies, the Monetary Authority of Singapore (MAS) is reportedly working with banks to develop new vetting procedures for crypto clients.According to a recent Bloomberg report, the MAS plans to provide more detailed guidance to banks on how to properly screen and monitor customers involved in cryptocurrency transactions.©Pexels/PixabayRegulatory clarityThe decision to provide guidance on crypto businesses comes as regulators around the world struggle to keep up with the rapidly-evolving digital currency industry. Many governments have been grappling with how to regulate cryptocurrencies in the face of concerns over money laundering, fraud, and other illicit activities.Singapore, however, has taken a more progressive stance on digital currencies, with the MAS recently announcing plans to create a regulatory framework for crypto derivatives trading. The country’s financial watchdog has also been working to improve AML (anti-money laundering) and CFT (combating the financing of terrorism) measures relative to crypto transactions.The MAS’s efforts to provide guidance to banks on crypto businesses are part of this broader push to promote responsible use of digital currencies in Singapore. By providing clear and detailed guidance to financial institutions, the regulator hopes to prevent illegal activities from taking place while also promoting the growth of the crypto industry.The MAS’s approach is seen as a positive development for the crypto industry, as it provides a clear framework for financial institutions to work within. This could help to boost confidence in the crypto market, potentially leading to increased investment and adoption.Striking the right balanceAt the same time, however, some industry observers have expressed concerns that overly strict regulations could stifle innovation and limit the potential of cryptocurrencies. They argue that a balance must be struck between protecting consumers and promoting innovation in the digital currency industry.Despite these concerns, the MAS’s efforts to provide guidance on crypto businesses are likely to be welcomed by financial institutions and industry participants alike. As the use of digital currencies continues to grow, it is becoming increasingly important for regulators to provide clear and comprehensive guidance on how to operate within this rapidly-evolving industry.Previous failuresSingapore hasn’t always gotten its approach to cryptocurrency right. In 2021, the MAS put global crypto exchange Binance on its investor alert list. Binance felt compelled to curb its service offering in the city state. The consequence of that action was that a disproportionate number of Singaporeans proceeded to open accounts with FTX only later to get caught up in the collapse of the exchange.The Monetary Authority of Singapore’s decision to provide guidance on crypto businesses is bullish for the digital currency industry. By providing clear and detailed guidance to financial institutions, the regulator is promoting responsible use of cryptocurrencies in Singapore while also boosting confidence in the market. However, there is a need to strike a balance between protecting consumers and promoting innovation in the industry, as overly strict regulations could stifle growth and limit the potential of cryptocurrencies.

Japan's Financial Services Agency (FSA) is proposing new legislation in an effort to prevent the assets of Japanese investors held on crypto exchanges from being transferred overseas. According to local news outlet Jiji Press, the Japanese regulator recently put forward the idea of drafting such a bill. It’s thought that the move suggests that the Japanese regulators have learned from the collapses of cryptocurrency exchanges Mt. Gox and FTX. Photo by Jaison Lin on UnsplashLearning from past failuresWhile Japan already had a higher standard of regulation in place prior to the FTX collapse, likely as a consequence of the authorities having experienced the downfall of Mt. Gox in February 2014, there is still room for improvement.  While funds had been ring-fenced for FTX Japan users, those who accessed services advertised in Japan through the FTX app were deemed to have been accessing a service which fell under an international jurisdiction, denying them the same protections otherwise offered to FTX Japan platform users as a consequence of the regulations that had been put in place. Incorporating a holding orderJapanese media outlet Nikkei described this latest move by the Japanese FSA as follows: “The Financial Services Agency is moving towards creating a new ‘holding order’ in the Payment Services Act, which regulates cryptocurrency exchanges, that will order them not to take domestic assets entrusted to them by customers overseas.” Consequently, the regulator is looking to add this as the latest proposed amendment to the Payment Services Act. Back in September it emerged that amendments to that existing legislation were being looked at with a view towards making it easier for businesses to incorporate digital assets into their service offerings. The regulator has also been mulling over the reclassification of crypto as a financial instrument by amending the Payment Services Act accordingly. Additionally, a more generous tax policy is being proposed. Currently, the Japanese authorities impose a tax rate of up to 55% on cryptocurrency-related revenues. Corporate holders of digital assets have to apply a 30% tax rate, irrespective of income or profits. With that, a 20% tax rate is being considered. The matter became a political issue prior to the East Asian nation’s recent elections, with the leader of the Democratic Party for the People (DPP) backing the application of a 20% crypto tax rate. The application of a holding order has applied previously to companies that have been registered under the Financial Instruments and Exchange Act. This proposed amendment would see it applied to virtual asset trading platforms as part of the Payment Services Act. Guarding against bankruptcy lossesIf applied, the amendment would prevent loss of Japanese investor funds in circumstances where a crypto exchange platform goes into bankruptcy. Legal precedent set in the FTX bankruptcy in the United States means that if a user’s funds go into a non-individually segregated hot wallet belonging to an exchange, any property rights, even if explicitly outlined in the terms of service, are lost.  A company can make a case to go into bankruptcy in any international jurisdiction, which means that this precedent has potential implications for all market participants. The proposed amendment from the Japanese FSA would serve to protect investors from such an eventuality.

India Launches Crypto-Enabled Web Browser InitiativeIn a further leap into the digital frontier, the Indian Ministry of Electronics and Information Technology (MeitY) has unveiled the Indian Web Browser Development Challenge (IWBDC), signaling a significant move towards reducing the nation’s reliance on foreign technology.Photo by Julian Yu on UnsplashIndigenous web browserCentral to this ambitious initiative is the creation of an indigenous web browser with an innovative twist — the integration of cryptographic features for digitally signing documents. This advancement is poised to heighten the security and efficiency of online transactions, elevating India’s digital landscape.The launch event for the challenge took place at the India Habitat Centre and showcased a collaborative endeavor involving MeitY, Controller of Certifying Authorities (CCA), and the Centre for Development of Advanced Computing (C-DAC).Harnessing blockchain technologyAt its core, this initiative aims to bridge the traditional internet framework with the burgeoning potential of blockchain technology. A press release published by MeitY on Wednesday clarified that the web browser will boast an embedded CCA India root certificate, bolstering the browser’s security framework and upholding the sanctity of data privacy.Sunita Verma, Research & Development Group Coordinator at MeitY, underscored the profound significance of this initiative in India’s digital narrative. She conveyed the message from Alkesh Kumar Sharma, MeitY’s Secretary, emphasizing that this challenge embodies a pivotal stride toward realizing the vision of an “Aatmanirbhar Bharat” or self-reliant India.Further echoing this sentiment, Verma stated:“Digital India has orchestrated a transformative shift in our nation’s operational fabric. As we journey forward, the convergence of technology and homegrown innovation stands as a critical waypoint. More than just a browser, this is a symbol of a self-sufficient, digitally empowered India.”Progressive use caseIn line with the drive towards digital sovereignty, Arvind Kumar, MeitY’s CCA, illuminated the paramount significance of trustworthiness and security in the realm of digital interactions. He expressed his confidence that the forthcoming browser, fortified with the India Root Certificate, will render the nation more resilient against internet vulnerabilities, ultimately curbing dependence on foreign technology players.The IWBDC extends an open invitation to innovators across diverse domains, encompassing academia, industry, startups, and individuals, to contribute their ingenuity to this groundbreaking venture. The challenge brings with it a substantial prize pool of Rs. 3.41 crore ($0.4 million), offering not only financial incentives but also a chance to shape the trajectory of India’s digital future.While establishment agencies in India have largely been opposed to the legalization of cryptocurrencies, this initiative demonstrates that others are looking to exploit the blockchain and cryptocurrency innovation.While the Indian government has been active in calling for global crypto regulation, the country itself has not as yet finalized any such legislation relative to Web3 and cryptocurrency. Initiatives like this one help to showcase the possibilities that this innovation can bring about. That should serve to steer regulation in India towards a set of rules that enable the further development of that innovation.As the curtains rise on the Indian Web Browser Development Challenge, the world’s most populous nation is taking a decisive stride towards asserting its tech self-reliance, intertwining innovation with security, and laying the foundation for a digitally progressive India.