Hong Kong gearing up to give crypto derivatives the go-ahead

Korean Blockchain Firm Proposes Fintech Collaboration in CambodiaSouth Korean fintech and blockchain company KONDOR recently made an announcement through a press release regarding the establishment of a blockchain fintech advisory board in Cambodia. The firm has proposed a business agreement to the Securities and Exchange Regulator of Cambodia (SERC) with the aim of ensuring sustainable growth in the financial sector and capital markets.Photo by allPhoto Bangkok on PexelsFintech advisory boardThe advisory board comprises experts from various fields, including finance, economics, law, blockchain technology, fintech, and artificial intelligence. They will function independently, offering counsel on policy decisions.Sou Soucheat, Director General of SERC, highlighted that Cambodia is currently in the process of rebuilding and has a youth-driven economy and financial markets. He sees the collaboration with KONDOR as a valuable opportunity to develop a future-oriented financial system.The advisory board will see participation from KONDOR and other notable members, namely VEXK, a global digital asset exchange in Vietnam; Blue Contents, a Honolulu-based digital economy research center; and the Paññāsāstra University of Cambodia, a key player in the country’s educational field.KONDOR and VEXK have put forth a proposal for the joint establishment of a trust company and the pursuit of a custody license in alignment with Cambodia’s revised trust law of 2019.Procuring licensesFollowing the proposal’s approval, VEXK plans to procure a license as a digital asset exchange, as well as a license to establish a trust company. This would enable VEXK to effectively oversee clients’ digital and physical assets through accounts within the established trust company. The safety of these assets will be ensured through insurance coverage provided by reputable global insurers. Furthermore, VEXK will acquire the ability to facilitate USD trading and will retain the digital asset exchange license for five years.The license application will gain support from the SDG Impact Fund, a US-based organization managing $11 billion worth of assets, and the Estates & Infrastructure Exchange (EIX), a project bond exchange based in London.EIX CEO Mark Worrall said that active support from a securities regulator in the dynamic and expanding Web3 era would certainly contribute to Cambodia’s economic growth.

Japan appears to be gearing up for the potential launch of its central bank digital currency (CBDC), the digital yen, as the government and the Bank of Japan (BoJ) collaboratively lay the legislative foundation for its rollout. While neither the BoJ nor the government has officially committed to the CBDC launch, recent developments indicate an accelerated push for its development. The BoJ's heightened focus on digital yen comes amidst concerns about falling behind China's and Europe's rapid progress in the CBDC space.Photo by Wenhao Ji on UnsplashOvercoming legal issuesAccording to a report by Japanese media outlet NHK, in a recent meeting, the Japanese government and the BoJ discussed future tasks and legal issues related to its CBDC implementation. To ensure a smooth and legally unobstructed launch, Tokyo aims to establish the necessary legal framework well in advance. Local news media Coinpost reported that the proposed legislation is set to "assume the introduction of the digital yen" and may involve amendments to key laws such as the Bank of Japan Act, the Criminal Code and the Civil Code. The goal is to finalize the list of required legal amendments by spring of the current year. In a meeting between Japan's central bank and the Finance Ministry, executives from relevant ministries and central bank directors explored various aspects of the CBDC. Discussions included the collaboration between a potential central bank digital currency and private cashless businesses, with a focus on convenience and personal data protection. Finance Ministry keen on launch ASAPLast month, the central bank received a report from a Ministry of Finance expert panel which recommended the launch of the digital yen without delay. The Ministry of Finance's December meeting addressed the division of roles between the Bank of Japan and intermediary banks, proposing a "two-tiered model" where domestic commercial banks play a pivotal role in digital yen issuance. Acting as intermediary institutions, these banks will bridge the gap between the central bank and digital yen users. The government and the BoJ are also contemplating ways to involve private businesses in the CBDC project while ensuring fair competition. Security and data privacy considerationsKey considerations in the discussions involve interoperability with other payment methods, ensuring security and handling user information safely. There is also an exploration of potential cross-border payment options. The government and the BoJ are committed to a comprehensive approach that considers various aspects of the CBDC project. Japan's unique context in the CBDC landscape is highlighted, with its continued reliance on cash and the presence of multiple private-sector tokenized money initiatives. Notably, the country boasts over 100 institutions and enterprises exploring digital currency through a digital currency forum since 2020. Separate initiatives, such as the MUFG-backed Progmat DLT platform, contribute to Japan's diverse digital currency landscape. Providing another example of progression in the digital assets arena, it emerged in September that the country is looking to permit startups to raise capital from venture capital firms using digital tokens rather than traditional equity. 

Coins.ph leads Digital Asset Exchange Alliance in Southeast AsiaCoins.ph, a leading Filipino cryptocurrency exchange, has taken a step towards promoting responsible and secure cryptocurrency usage in Southeast Asia through the establishment of the Digital Asset Exchange Alliance (DAEA).Photo by Mike L on UnsplashRegional industry partnershipIn a press release published on Friday, the company announced the formation of the industry body. The strategic partnership includes other prominent licensed exchanges in the region, namely Coinhako (Singapore), Indodax (Indonesia) and Bitkub (Thailand).Wei Zhou, CEO of Coins.ph, expressed enthusiasm about the collaborative effort, stating:“Coins.ph is excited to work with our Southeast Asian counterparts in advancing the responsible and secure use of cryptocurrencies and promoting the development of user-friendly and compliant products for users.”Zhou emphasized the belief that the alliance’s combined efforts would contribute to building a more robust and resilient cryptocurrency ecosystem in Southeast Asia.Unifying licensed exchangesThe DAEA represents a milestone in unifying licensed exchanges across the Southeast Asian region, aiming to enhance regulatory advocacy by leveraging the collective expertise and experience of the four founding exchanges. It seeks to foster collaboration by sharing protocols and best practices to elevate service quality and bolster security measures.Educating users about the benefits of trading on licensed exchanges and the importance of following regulatory guidelines is a core commitment of the Alliance. This extends to promoting financial literacy, consumer protection and responsible trading practices in the cryptocurrency space.The cryptocurrency sector has experienced an outsized proportion of scams and fraud. Within that, Southeast Asian crypto users and platforms have been hardest hit, with instances in recent months of malicious activity across the region, from pig butchering scams to exchange hacks and crypto-related phishing. Regulators have started to counteract such problems, but a level of greater organization within crypto through bodies like the DAEA will go some way further towards protecting crypto users.Building a safer ecosystemYusho Liu, CEO of Coinhako, highlighted the significance of the Alliance for the entire cryptocurrency industry, emphasizing the role of licensed exchanges in fostering trust and growth. He stated:“By collaborating with Coins.ph, Indodax, and Bitkub, we are taking a monumental step towards building a safer and more transparent ecosystem for users in the region.”As the blockchain space evolves with a growing emphasis on regulatory compliance, Coins.ph, along with Coinhako, Indodax and Bitkub, has distinguished itself by prioritizing security and trust through obtaining licenses from their respective regulatory bodies.Moving towards self-regulation2022 brought with it some spectacular crypto platform failures such as FTX, which affected locations like Singapore disproportionately. A regulatory backlash has resulted in 2023, and it is amid that backdrop that we are seeing increasing efforts towards better organization and self-regulation within the crypto sector.The formation of the Digital Asset eXchange Alliance in South Korea, involving a consortium of the top five exchange businesses in the country in July of this year, is a stand-out example. In Taiwan, regulators have been actively fostering self-regulation. Those efforts have resulted in the establishment of an industry group of Taiwanese Exchanges.