Cango ramps up crypto production

South Korea’s neobank Kbank has partnered with BPMG, a domestic Web3 developer, to pursue stablecoin initiatives abroad, the Electronic Times reported. The companies are preparing proof-of-concept (POC) trials with firms in Thailand and Dubai as part of a broader push to participate in global financial infrastructure. Following a recent agreement with Kbank, BPMG has begun collaborating with a Thai company on a stablecoin project and is working with an investor in the United Arab Emirates (UAE) on the issuance and operation of stablecoins. Kbank plans to leverage BPMG’s blockchain technology to develop stablecoin business models for remittances, currency exchange and payments, and to support the build-out of related systems. The bank is focusing first on Asia and the Middle East.Photo by Shubham Dhage on UnsplashReducing intermediaries and automating regulatory complianceAnother priority is cutting intermediaries in cross-border transfers to speed up remittances and reduce costs via distributed ledger technology. Drawing on BPMG’s patents in AI and blockchain, Kbank is also developing a tool to automate regulatory analysis across jurisdictions so it can tailor services to local rules. As digital transformation accelerates, stablecoins are gaining traction as a payment method for their low volatility and ability to enable real-time cross-border transactions. In April, Kbank joined the Pax Project, a stablecoin initiative backed by Japan’s three major banks—Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho. Through the project, Kbank is participating in trials for real-time transfers and settlement between South Korea and Japan. The bank has also formed a digital asset task force to advance the commercialization of stablecoin solutions. A Kbank official said combining blockchain with finance can deliver faster, more efficient global services and that the BPMG partnership is expected to demonstrate the practical utility of stablecoins, paving the way for integration into both domestic and international offerings. IPO timing hinges on Upbit renewalThe stablecoin push comes as Kbank is widely expected to submit a preliminary initial public offering (IPO) filing as early as this month, with a listing anticipated in October. A key variable, according to market watchers, is whether Kbank renews its contract with Upbit, South Korea’s largest cryptocurrency exchange, to provide real-name bank accounts—a regulatory requirement for fiat-to-crypto platforms. Kbank has been Upbit’s banking partner for five years, and deposits from the exchange account for roughly 20% of the bank’s total. Kbank is also seeing rising corporate activity around digital assets. As of Aug. 18, the bank had more than 100 corporate accounts dedicated to crypto trading—over double the 49 recorded at the end of last year—momentum widely attributed to its partnership with Upbit. Since launching corporate-focused services in late 2023, Kbank has provided real-name accounts to entities including government bodies, non-profits, and local municipalities. The uptick follows the financial regulator’s earlier decision to allow non-profits and trading platforms to sell crypto holdings, with implementation beginning in June.

Incheon Unveils Ambitious Four-Year Plan to Become a Leading Blockchain HubIncheon Metropolitan City, home to the largest international airport in South Korea, revealed on October 16 that it has successfully formulated a four-year comprehensive plan that aims to position Incheon as a blockchain hub and spearhead the digital economy sector. This ambitious strategy is slated from 2024 to 2027. The formulation of this plan was entrusted by Incheon to a third-party entity back in April.Shaping Incheon as a blockchain hub has been one of Mayor Yoo Jeong-bok’s policy objectives. Under his leadership, Incheon is dedicated to fostering an industrial ecosystem that supports the digital economy, with a special emphasis on blockchain technology — an essential component in the Web3 era.Photo by Shubham Dhage on UnsplashStrategic roadmapIncheon has crafted an action plan for the upcoming four years, with the primary aim of transforming itself into a city that promotes public involvement, fosters sustainable development, encourages cutting-edge innovation, provides a favorable environment for businesses, and advances technology.Mainnet launchAs the first step, Incheon will establish a blockchain mainnet in 2024. This infrastructure will serve as the foundation for the development of associated services and will offer citizens firsthand experiences of convenience.Through the construction of blockchain infrastructure, encompassing mainnets and testnets, Incheon strives to simplify the process for companies in need of blockchain technology. Even those without their own technological resources or substantial capital will find it more accessible to develop services utilizing blockchain within the city.Blockchain-based public servicesThe city has also discovered various blockchain-based public services for Incheon residents. One of them is constructing digital wallets that leverage resident identification cards through decentralized identifiers (DIDs). These digital wallets are designed to offer a streamlined, one-stop solution, allowing citizens to conveniently access a wide array of public services. For instance, Incheon residents will have the capability to gain entry to public facilities, access various discounts, make online reservations, and accumulate loyalty points, all through the straightforward authentication provided by these digital wallets.Furthermore, the city is looking to implement blockchain technology in the following public services. The “eco platform” will serve as an integrated system aimed at incentivizing citizens who actively engage in environment-friendly activities. The “volunteer platform” will simplify volunteer work processes, including certification and recognition. The “safety management platform” will ensure transparent and safe operations on construction sites.Incheon also plans to create a cluster for the blockchain industry in the Incheon Free Economic Zone (IFEZ). The plan is to attract a blockchain technology innovation support center in the Songdo area of Incheon to create synergies with local businesses.Support for blockchain startupsThe city seeks to create a support system for blockchain startups, assisting them from their inception to growth and global expansion. Additionally, efforts will be made to build a global cooperation network and attract foreign investment funds to further bolster the blockchain ecosystem.The four-year plan also delves into more specific objectives. Among them are the establishment of a system to nurture blockchain talent, creating a conducive environment for refining governance and policies, and initiating a branding campaign to bolster Incheon’s competitive edge in the global arena.Son Hye-young, who leads the Data Industry Division in Incheon City, emphasized that the four-year plan represents Incheon’s ambitious vision to establish itself as a blockchain technology hub. She also expressed the city’s commitment to actively support the growth of businesses in this sector and to create tangible and beneficial services.The detailed implementation strategy for the master plan will be disclosed at the Global Blockchain Incheon Conference (GBIC) 2023, a two-day event set to commence on October 30 at the Songdo Convensia.

MAS and NY Fed Publish Report on CBDC Cross-Border PaymentsNew York’s Federal Reserve Bank and the Monetary Authority of Singapore (MAS) have collaborated on an endeavor titled “Project Cedar Phase II x Ubin+,” examining the use of a central bank digital currency (CBDC) for wholesale cross-border payments using one or more vehicle currencies.The joint effort has culminated in the publication of a report detailing their findings and results. Commenting on the initiative, MAS Managing Director Leong Sing Chiong stated:“The Cedar x Ubin+ experiment envisages a future digital currency landscape where central banks can enable interoperability of wholesale CBDCs to facilitate more efficient cross-border payment flows including for less liquid currencies, without requiring a common infrastructure.”Photo by NASA on UnsplashExploiting positive DLT characteristicsSpecifically, the New York Innovation Center (NYIC) of the NY Fed was the entity that contributed directly towards the research project. The work built on previous phases of Project Cedar. The objective was to explore perceived advantages of digital ledger technology (DLT) such as reduced settlement risk and reduced settlement time, in the context of cross-border payments.The conventional system primarily uses the SWIFT financial messaging network. The approach is highly inefficient. It’s time-consuming and needlessly ties capital up in vostro and nostro accounts (accounts held for another entity from an account another entity holds). Tying up capital proves to be a liquidity headache for corporations and any business entity that gets involved with international trade settlement.Smart contracts and off-chain messagingAgainst that backdrop, the project team was focusing on harnessing the ability to effect atomic or real-time settlement using DLT. Having commenced the work in November, the project team decided to rely on hashed timelock smart contracts in order to bridge distinct ledgers, so as to effect cross-currency and cross-border transactions.According to the report, the proposed system also relied on off-chain messaging functionality. Cross-border trade settlement often involves a number of stakeholders. Off-chain messaging can be beneficial in disseminating information relative to the process to all stakeholders.The researchers found that each simulated payment scenario achieved end-to-end settlement in under thirty seconds on average, realizing the goal of near real-time settlement. In turn, that speed of settlement meant that stakeholders could be notified of payment finality within a matter of seconds. Certainty of settlement, and thus reduction in counterparty risk was achieved by simulating atomic settlement, such that transactions only settled if all legs in the cross-currency payment chain executed successfully.From the point of view of interoperability and autonomy, the experiment demonstrated the ability to safely execute across multiple ledgers without the need to involve a centralized clearing authority or the establishment of a shared central network.The Bank of International Settlement (BIS) recently highlighted the finding that on a daily basis, $2.2 trillion of foreign exchange transactions don’t use a payment versus payment (PvP) settlement mechanism. PvP is a less risky form of settlement where two currency legs are exchanged simultaneously. Singapore is more exposed than most in this regard. Therefore, the use of DLT to counteract that risk in line with the experiment’s findings would be a progressive step.