Malaysian regulator seeks feedback on crypto framework enhancements

South Korea’s central bank, the Bank of Korea (BOK), plans to begin testing peer-to-peer (P2P) transactions with its central bank digital currency (CBDC) in October, according to the Seoul Economic Daily. This will mark the second phase of its ongoing CBDC pilot, Project Hangang, which currently allows 100,000 citizens to use digital tokens for payments at both online and offline stores. In the fourth quarter, the pilot will also introduce voucher programs enabling local governments to distribute welfare benefits.Photo by Mathew Schwartz on UnsplashSandbox deadline pressureThe BOK originally planned to gather feedback from participants in the first phase and refine the system before proceeding. However, the central bank decided to speed up the timeline, as the broader project is operating under a regulatory sandbox program that provides two years of regulatory flexibility. A BOK official noted, “Since the current test ends in June, we can’t wait too long to move forward. Also, the fourth quarter timeline is still tentative.” While the BOK focuses on its CBDC, Korean commercial banks are accelerating efforts to develop stablecoin infrastructure and launch related pilot projects, Edaily reported. These initiatives reflect growing expectations that stablecoins will become a key tool for cross-border payments. Banks see this as an opportunity to attract new customers and earn fees from crypto exchanges by facilitating stablecoin transfers through their own networks. One example is Project Pax, a joint initiative involving Shinhan Bank, Nonghyup Bank and Kbank, which is testing stablecoin transfers between South Korea and Japan. Led by Japan’s digital asset platform Progmat, along with Korea’s Fair Square Lab and Korea Digital Asset Custody, the project enables Korean banks to send won-based stablecoins to Japanese financial institutions and receive yen-pegged stablecoins in return. Rising stablecoin useAn executive at a local bank expressed concern that South Korea is falling behind in stablecoin adoption. He predicted faster uptake, noting that consumers can save time and money by avoiding traditional foreign exchange processes. He also cautioned that, without action, the private sector could take the lead in building cross-border payment networks, bypassing the traditional SWIFT system. Another banker urged financial authorities to establish clear regulations for stablecoins, stressing the need for oversight as stablecoins are increasingly used to move foreign currencies out of Korea. Contrasting perspectivesHowever, BOK Governor Rhee Chang-yong remains skeptical of stablecoins, arguing that CBDCs offer far greater transparency. He pointed to the volatility of unregulated stablecoins and warned that their widespread use—especially if issued by private financial institutions—could undermine the central bank’s role as the sole issuer of legal tender. That said, financial authorities appear to be exploring a regulatory framework where CBDCs and stablecoins can coexist. Sharing his personal view, one official noted that while the future of stablecoins is uncertain, it’s important to remain open to various possibilities. He added that agencies are also reviewing recent changes in U.S. federal law, along with regulations in Japan and the EU. 

The trustee of the failed Japanese cryptocurrency exchange Mt. Gox is preparing to initiate repayments of bitcoin (BTC) and bitcoin cash (BCH), prompting fears of a market sell-off among traders and investors.Photo by Dmytro Demidko on UnsplashConfirming repayment detailsThe crypto community on the /mtgoxsolvency subreddit disclosed that the Tokyo-based bitcoin exchange has initiated the process of verifying creditors' addresses for forthcoming repayments. Emails have been sent to creditors, confirming that their repayment details have been validated with relevant cryptocurrency exchanges. The communication from Mt. Gox appears to be staggered, with users on different platforms receiving emails at varying times. Some Bitstamp users reported receipt of the email, while several Kraken customers mentioned that they were still awaiting the confirmation. Mt. Gox, cautioning creditors, clarified that users with disabled or frozen accounts would not be able to receive repayments using the provided addresses. Additionally, the emails specifically pertain to payments in bitcoin and bitcoin cash. This recent communication follows Mt. Gox's announcement in November, where it committed to returning approximately 142,000 bitcoin, 143,000 bitcoin cash and 69 billion Japanese yen, valued at over $5.67 billion at the announcement date and approximately $6.46 billion at the present moment. During the November announcement, Mt. Gox assured creditors that repayments would commence in the following months and weeks. Creditors with payment methods deemed "effective at this time" were earmarked to receive their assets first. Towards the end of December, some creditors reported the addition of yen-denominated balances to their PayPal accounts by Mt. Gox, signaling progress in the repayment process. Market fearsThe fear among market participants of a distribution of bitcoin from the Mt. Gox estate has cast a shadow over the sector over the course of a number of years. With this latest development, it appears that the estate is finally on the cusp of executing on that distribution. If distribution is achieved in the short term, it will come at a time when bitcoin has experienced a major unit price pullback already. Since the approval of spot bitcoin exchange-traded funds (ETFs) in the United States earlier this month, it appears that another bankrupt crypto exchange, FTX, has sold $1 billion worth of Grayscale Bitcoin ETF shares into the market. That move is believed to have been responsible for a dramatic drop in bitcoin’s unit price. In tandem with that event, some commentators believe that a pullback at this point is healthy for the market. That’s the view of Charles Edwards, founder of Capriole Investments. Taking to social media, Edwards wrote:”We're still not here yet. This pullback is very overdue and lower is healthier.” At the time of writing, bitcoin has a unit price of $39,884, down from a high earlier this month of $48,494. Confirmation emails have been reported by several Reddit users, with Bitstamp confirming for most, and a few Kraken users also acknowledging receipt. Nevertheless, a significant number of Kraken users mentioned they are yet to receive the confirmation email. Mt. Gox officially closed its doors in February 2014, almost a decade ago, after succumbing to an exploit in 2011.  

Nuvei Teams Up with Mastercard on APAC Instant PayoutsNuvei, a crypto-friendly Canadian fintech firm, has partnered with global payments giant Mastercard, unveiling plans to bring nearly instantaneous payout capabilities to online trading platforms and investors, with a strong focus on the Asia Pacific region.Photo by Allison Saeng on UnsplashHarnessing Mastercard SendThis collaboration, announced by Mastercard on Monday, harnesses the power of Mastercard’s Send service. Mastercard Send is a payment solution that enables secure, real time fund transfers for organizations around the world, in over one hundred markets.The service has already been made available to Nuvei’s clientele in Singapore, with Nuvei claiming that it will speed up payments for the benefit of the merchants and consumers that make up its user base.An increase in the rate of digitalization, spurred by growth in online trading and remote working on an international basis is fueling a need for ever more seamless and rapid payment solutions. Through the use of Mastercard Send, traders are able to cash out of their investments immediately and efficiently.Commencing later this year, Nuvei will extend the service to customers in Australia and Hong Kong.“Trading platforms rely on fast, secure deposits and payouts to optimize user experience. Partnering with Mastercard Send enables us to offer our partners another trusted, instant payout method that will win new traders and generate revenue growth,” said Philip Fayer, the Chair and CEO of Nuvei.This sentiment was echoed by Sandeep Malhotra, Executive Vice President of Products & Innovation, Asia Pacific at Mastercard. “Given the boom in online trading in the Asia Pacific region, Mastercard Send presents Nuvei’s customers with the opportunity to improve the payments experience for their users while standing to grow their own revenues — a win-win,” he said.Crypto service offeringNuvei claims to have an active customer base spread across two hundred countries, offering more than six hundred alternative payment methods. As part of its array of services, the fintech firm has also been active relative to crypto.In a move that served to integrate crypto alongside its conventional payments products, Nuvei purchased crypto payments firm Simplex in 2021. Simplex was founded in 2014, offering fiat to crypto conversions involving over fifty cryptocurrencies, while integrating with global exchanges such as Binance and OKX.Later that year, the Canadian fintech company collaborated with Mastercard rival Visa, in offering crypto friendly debit cards. Late last year, it signed a deal with Danish blockchain-based payment platform e-Money. This arrangement saw Nuvei enable a fiat on-ramp for e-Money’s euro stablecoin (EEUR).Nuvei recently released its 2023 second quarter results, recording a 68% increase in total trade volume at $50 billion compared to $20 billion in the same period last year. Earlier this year, the firm announced that it was acquiring Atlanta-based integrated payments provider Paya as part of a deal believed to be worth some $1.3 billion.