Top Korean Crypto Exchanges Witness Surge in Listings and Delistings During H1

Banking Difficulties Remain in Hong Kong for Crypto Start-UpsWhile Hong Kong has demonstrated a very clear crypto-friendly stance over the course of the past six months, crypto start-ups are still struggling with banking in the Chinese autonomous territory.Photo by Manson Yim on UnsplashLicensing backlogAll the signs are that Hong Kong is striving to develop itself as a regional hub for crypto and blockchain related business. Encouraged by that stance, against a background of the United States becoming openly hostile to crypto over that very same time frame, applications are streaming in from international firms to be licensed to operate their businesses in the city.In discussion with crypto start-up applicants, CoinDesk has established that the issue extends to firms that have already obtained a license to operate. To compound matters, the Hong Kong regulator, the Securities and Futures Commission (SFC), has a shortage of manpower, with just eight officials currently working on the applications of eighty crypto firms.Speaking to that backlog, Amy Yu, APAC CEO for Swiss crypto financial services company, SEBA Bank, stated: “This probably would have been a different story six or nine months ago.”A known problemIt appears that both the SFC and its regulatory peer, the Hong Kong Monetary Authority (HKMA) were aware of the issue and tried to get out ahead of it. Late last month, both regulators convened a meeting with bank officials and virtual asset service providers (VASPs).The objective was to try to forge a path forward such that banks could amend their approach, enabling greater facilitation and acceptance of crypto businesses such that the banks would be more inclined to approve bank account applications from those fledgling businesses.Arthur Yuen, Deputy CEO of the HKMA addressed the matter in a blog post published to the regulator’s website on April 27. Yuen was clear in calling on the banks to enable banking for VASPs:“With the implementation of the regulatory regime for VA [virtual assets] activities in Hong Kong and the strengthening of supervisory regimes in different jurisdictions according to the international standards, and as the banking industry develops a better understanding of the VA industry over time, we expect that regulated virtual asset service providers (VASPs) will be able to successfully apply for a bank account through a reasonable process.”Banker resistanceElaborating on the matter further, it’s clear that Yuen and his colleagues understand the importance of banking in enabling this nascent business sector such that the broader strategy of a pro-crypto business environment is affected in Hong Kong. “To attract businesses from new markets, it is crucial to have high quality financial services, while enhancing corporate access to bank accounts would be one of the key priorities,”he stated.An attendee at that regulator-organized round-table last month said that “It was more like a wish list from the regulator,” and that “whether the banks fully embrace it is another matter.” The issue remains as a major impediment to the ability of crypto start-up companies to operate, Some are being forced to try and work around the stumbling block, relying instead on overseas banking partners.

Ripple to lead National Bank of Georgia’s CBDC pilot projectThe National Bank of Georgia (NBG) has selected enterprise blockchain and cryptocurrency solutions firm Ripple as the official technology partner for its ambitious Digital Lari (GEL) pilot project. The initiative aims to explore Ripple’s central bank digital currency (CBDC) technology, assessing its practical applications and potential benefits for a wide range of stakeholders, including the public sector, businesses and retail users.Photo by Max Kukurudziak on UnsplashCiting Ripple’s CBDC tech capabilitiesRipple divulged details of the collaboration via a press release published to its website on Thursday. The decision to entrust Ripple with this pivotal role came after a competitive selection process. The Georgian central bank cited a number of reasons for choosing to partner with Ripple, including Ripple’s deep understanding of the project’s objectives and a commitment to its success.The central bank thought that it had a clear project development roadmap and that it could facilitate a gradual deployment approach to various use cases. Additionally, the NBG acknowledged Ripple’s extensive experience in implementing real-life pilot projects, encompassing primary CBDC digital infrastructure, smart contracts and tokenization.Ripple’s CBDC solution, the Ripple CBDC Platform, emerged as the frontrunner for its capacity to provide a comprehensive end-to-end solution. The company launched the platform in May of this year. This platform empowers central banks, financial institutions and governments to seamlessly create, manage, transact and redeem CBDCs. Notably, it leverages the XRP Ledger (XRPL), known for its energy efficiency and open-source nature.Natia Turnava, Acting Governor and Member of the Board of the National Bank of Georgia, expressed satisfaction with the choice of Ripple as their official technology partner, emphasizing Ripple’s technical excellence and the expertise of its team.She also expressed gratitude to other companies that participated in the selection process. Ripple’s James Wallis, VP of Central Bank Engagements, highlighted the NBG’s pioneering role in adopting blockchain technology to usher in the digital era for the Georgian economy.He noted that this pilot project, empowered by the Ripple CBDC Platform, would set the stage for transformative advancements in blockchain technology’s utilization within the public sector, enhancing efficiency and transparency in transactions. Back in May, Wallis remarked on the launch of its CBDC platform that he believed “this platform will help solve problems for many central banks and governments who are devising plans and developing a technology strategy for CBDC Implementations.” He added:“The innovative capabilities of the platform will help enable instant settlement of both domestic and cross-border payments, reduce risk, and improve the user experience of quickly sending and receiving digital currency on either side of a transaction.”Transitioning from selection to pilot phaseWith the selection phase now concluded, the NBG is preparing to transition to the pilot stage, where they will test the Ripple CBDC Platform in a live environment. This real-world testing will enable the NBG to assess the practicality of select use cases, taking Georgia one step closer to realizing the full potential of CBDCs in their economic landscape.Ripple’s impact is not limited to Georgia. It has been actively engaging with governments and central banks worldwide. Ripple has announced five pilot programs in collaboration with countries like Bhutan, Palau, Montenegro, Colombia and Hong Kong. Furthermore, discussions are underway with over 20 other nations across the globe.

South Korea Embarks on Wholesale CBDC Pilot ProgramAiming to pave the way for a future-oriented monetary infrastructure, South Korean financial agencies announced a plan on Wednesday (local time) to pilot a central bank digital currency (CBDC). This trial is designed to evaluate its practical use in real-world scenarios.The Bank of Korea (BOK), alongside the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS), has been working with the Bank for International Settlements (BIS) from the inception of this project’s blueprint. Together, they plan to partner with multiple commercial banks to successfully carry out this initiative.Photo by Y K on UnsplashWholesale CBDCThe test will concentrate on a wholesale CBDC designed for transactions and settlements between financial institutions. This concept is akin to how commercial banks use reserves in their central bank accounts for transactions and settlements.Meanwhile, banks will introduce tokenized deposits for public use within the CBDC network. These payment instruments will circulate securely within the new monetary infrastructure built by the BOK and managed jointly with the FSC and the FSS.The pilot of this cutting-edge monetary infrastructure is poised to set the stage for the introduction of diverse, innovative payment and financial services that stand out from current offerings. This effort will also lay the groundwork for newer financial products, like security tokens, to be traded with greater safety and efficiency.Participation from citizensThe test aims to complete its Proof of Concept (PoC) through technical trials in simulated settings. Furthermore, a select group of citizens will be given the opportunity to engage in specific use case tests, letting them experience firsthand the advantages of the emerging digital payment methods. This project will significantly contribute to the future research and development of CBDC infrastructure.The Korean financial authorities have engaged in in-depth discussions regarding policy matters leading up to the test. To ensure alignment with existing laws, only banks will be involved in this initial phase. Decisions on expanding the test will come later, after a thorough evaluation of relevant policy considerations after the trial.The agencies will continue working to ensure that transaction tests involving citizens are conducted with sufficient user protection measures under the existing legal framework.Moreover, from the outset of the test’s preparation, the BIS offered insights from its research and development experiences with CBDC systems. In particular, members from the BIS’s Innovation Hub and the Monetary and Economic Department provided technical advice on designing and constructing a CBDC network. Stemming from their discussions, the BIS and the BOK jointly released a report highlighting the test’s importance and its intricately crafted model.This trial is a step towards identifying the best CBDC model suited for Korea’s financial and economic landscape. It’s important to note that the test doesn’t necessarily indicate a complete rollout of a CBDC or the final version of a CBDC network.Moving forward, the BOK, FSC, and FSS will form a collaborative working group. They’ll work hand-in-hand with pertinent ministries and entities, including the Ministry of Economy and Finance, to ensure a seamless execution of the test. Their technical partnership with the BIS will also remain ongoing.The selection process for a system developer began on October 4. Later this month, there will be an informational session for companies and banks engaged in the project. By the end of November, the financial authorities will unveil information regarding the banks involved and the specific use cases slated for testing. Public involvement is anticipated to start in the fourth quarter of next year.