Bhutan’s GMC to establish strategic crypto reserve

Thai Central Bank Collaborates With Singapore’s 2C2P on CBDC PilotThe Bank of Thailand is set to commence a pilot project for a retail central bank digital currency (CBDC) within a regulatory sandbox later this month.Three participating fintech firmsThat’s according to local media, with reports suggesting that three payment providers will participate in the project, which is expected to involve up to 10,000 users and run until August.The scheme will involve two Thai banks, Bank of Ayudhya (Krungsri), Thailand’s fifth largest bank, and Siam Commercial Bank. Singapore-based payments service provider 2C2P will also collaborate with the Thai central bank on the CBDC initiative. 2C2P is a global payments platform which helps businesses to accept payments securely online, on mobile, and in-store. Each organization has developed an app exclusively available to selected users, encompassing a digital wallet and a QR code scanner.Krungsri plans to engage up to 2,000 staff members and approximately 100 merchants in the project, focusing on locations around the bank’s headquarters. Furthermore, the project will expand to include the Ploenchit branch.Photo by Florian Wehde on UnsplashMaintaining relevanceBanks are having to embrace the need to adapt to the eventuality of developments like CBDCs as, depending upon how they’re implemented, they could render some banking products obsolete. Sam Tanskul, the Managing Director of Krungsri Finnovate, a division of the Thai banking business that focuses on strategic investments, expressed the need for the bank to establish a distinct strategy for differentiating the retail CBDC from its existing PromptPay mobile payments service.Siam Commercial Bank’s pilot project will operate in a similar manner to Krungsri’s, involving staff members and nearby merchants as participants. The Bank of Thailand has emphasized that the project aims to facilitate learning rather than serve as an official pilot launch. At present, the central bank has not disclosed any official plans to implement a CBDC.Wholesale and retail CBDCsThe Bank of Thailand commenced the development of a wholesale CBDC back in 2018. It has actively participated in various projects such as the Bank for International Settlements’ (BIS) mBridge cross-border payment initiative and the Project Inthanon-Lion Rock collaboration with the Hong Kong Monetary Authority (HKMA).In a move to foster the growth of the digital token market, Thailand waived corporate income tax and value-added tax for companies issuing investment tokens in March. While this decision is expected to result in an approximate loss of $1 billion in revenue for the country, it is projected that investment tokens will generate $3.7 billion over the next two years, as stated by a government spokesperson.The Bank of Thailand’s forthcoming retail CBDC pilot project is one of a plethora of such projects being pursued throughout the Asia-Pacific region. In Japan, the Bank of Japan recently completed the second phase of a proof of concept project relative to its CBDC, with the project now progressing to phase three. Last month, it emerged that the Bank of Korea is collaborating with Samsung Electronics relative to its CBDC project. Meanwhile, India is progressing further in trialing its CBDC, while China is further along the development curve than all others in that respect.

AsiaNext, a Singapore-based institutional digital asset trading venue, has officially rolled out its cryptocurrency derivatives trading platform.Photo by Kirill Petropavlov on UnsplashWintermute and B2C2 collaborationsThe launch involves notable trading members such as Wintermute and London-headquartered liquidity provider B2C2. B2C2 is a subsidiary company of Japanese financial services conglomerate SBI Holdings. SBI acquired the company in August of last year with B2C2 expressing the view that the acquisition would represent an opportunity for the company to broaden its client base. SBI partnered with Swiss financial infrastructure firm Six Group in a joint venture to establish AsiaNext back in 2020 with a view towards driving institutional digital asset liquidity. Meanwhile, Wintermute’s involvement with AsiaNext in this instance follows its move in 2023 to expand its Singapore base, where it conducts its derivatives business. In November, Wintermute Asia conducted its first-ever options block trade through the CME Group, one of the world’s leading derivatives marketplaces. Wintermute's Founder & CEO, Evgeny Gaevoy, highlighted the significance of the partnership with AsiaNext in the context of traditional financial institutions seeking alternative exposure to digital assets. Gaevoy stated: "Partnering with AsiaNext enables us to elevate our derivatives offering, positioning Wintermute in the foreground of the expanding digital asset ecosystem." The AsiaNext platform asserts that it provides enhanced risk management with reduced counterparty and settlement risk. Additionally, AsiaNext offers capital efficiencies through intraday margining and settlement processes, supporting high-frequency trading and ensuring availability 24/7 for crypto derivatives trading. Chong Kok Kee, CEO of AsiaNext, emphasized the platform's commitment to providing a secure environment for institutional investors to explore digital assets in the region. By prioritizing regulation and rigorous governance, AsiaNext aims to establish itself as a trusted venue for exposure to digital assets. B2C2 CEO Thomas Restout commented on the positive nature of the collaboration. He stated:”We’ve witnessed [AsiaNext’s] unwavering commitment to governance and risk management, alongside their focus on aligning closely with our needs. This instills a high level of confidence in our partnership. Being at the forefront of digital asset adoption, we are pleased to provide liquidity on the venue through our collaboration.” Licensing approvalsIt's worth noting that AsiaNext obtained a Recognized Market Operator (RMO) license from the Monetary Authority of Singapore (MAS) in September. However, this license specifically pertains to tokenized securities, and as such, the crypto derivatives trading operates through a separate subsidiary. In June the company had acquired in-principle approval for a Capital Markets Services (CMS) license. On the digital securities front, SIX Digital Exchange (SDX) and Osaka Digital Exchange (ODX), operated by SIX and SBI respectively, play key roles in secondary markets, showcasing the partners' commitment to advancing regulated digital securities markets. Launched in late 2021, SDX was the world's first regulated digital securities market. SBI followed suit with the recent launch of ODX on Christmas Day. The anticipated approval of the first U.S. spot bitcoin ETFs adds a timely dimension to the launch, potentially driving increased demand for hedging strategies in the market. 

Singapore High Court Recognizes Cryptocurrency as Personal PropertyIn a significant ruling on July 25, Judge Philip Jeyaretnam of the High Court of Singapore declared that cryptocurrency is capable of being held in trust and should be recognized as property.The judge’s decision came in response to a case brought by Dubai-headquartered crypto exchange Bybit against its former employee, Ho Kai Xin, who was accused of transferring approximately 4.2 million Tether (USDT) from the crypto exchange to her private accounts without authorization.Photo by Tingey Injury Law Firm on UnsplashNo fundamental differenceIn his ruling, Judge Jeyaretnam emphasized that there is no fundamental difference between cryptocurrencies, fiat money, or even physical objects like shells when it comes to their status as property. He argued that as long as these objects hold value and are based on mutual faith, they can be considered property. The judge’s verdict is seen as a crucial step in establishing the legal status of digital assets within the Singaporean jurisdiction.Addressing the argument that cryptocurrencies lack physical presence and therefore cannot be considered property, Judge Jeyaretnam drew an analogy, stating: “We identify what is going on as a particular digital token, somewhat like how we give a name to a river even though the water contained within its banks is constantly changing.” By equating cryptocurrencies to named entities, the judge made it clear that physical tangibility is not a prerequisite for something to be classified as property.Cryptocurrencies have valueFurthermore, the ruling challenges the perception that cryptocurrencies have no “real” value. Judge Jeyaretnam firmly refuted this notion, highlighting that the value of any asset, whether physical or digital, is ultimately determined by collective human belief and judgment.One critical classification made by the judge is grouping cryptocurrencies under the category of “things in action” within British common law. This categorization means that cryptocurrencies are considered a form of property, over which personal rights can be claimed and enforced through legal actions, rather than requiring physical possession.The judge’s decision also referenced the Monetary Authority of Singapore’s (MAS) consultation paper, which proposes implementing segregation and custody requirements for digital payment tokens. By taking cues from the MAS’s stance on digital assets, the court emphasized the legality of holding cryptocurrencies on trust, as long as practical methods for identification and segregation are in place.Cues taken from existing lawSingapore’s legal framework for property also played a crucial role in the ruling. Judge Jeyaretnam pointed to Order 22 of Singapore’s Rules of Court 2021, which defines “movable property” to include various assets, such as cash, debts, bonds, shares, and cryptocurrency or other digital currency. This inclusion reinforces the recognition of cryptocurrencies as a valid form of property within Singaporean law.In April of this year, a Hong Kong court reached a similar conclusion, recognizing cryptocurrency as property. In the High Court of Justice in London the following month, non-fungible tokens (NFTs) were recognized as “private property.”Overall, Judge Jeyaretnam’s ruling represents a significant milestone in the legal recognition of cryptocurrencies in Singapore. By acknowledging cryptocurrencies as property, the court provides greater clarity and certainty for crypto users and investors while affirming the importance of embracing digital assets within the nation’s legal framework.