Gemini Announces Singapore Expansion Plans

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.

Korean regulator monitors non-listed token amidst peer-to-peer trading surgeThe South Korean financial regulator is closely monitoring BTCMobick, a non-listed token issued by crypto influencer Oh Tae-min, who is known for authoring books like “The Great Bitcoin” and “Bitcoin and the Geopolitics of the Dollar.” The Financial Services Commission (FSC) is cautioning local crypto exchanges regarding the potential for price manipulation should the token be listed.Photo by Daniel Bernard on UnsplashBTCMobick TokenThe BTCMobick token is reportedly being traded peer-to-peer at around KRW 300,000, which is approximately equivalent to $230, in chat rooms of messaging apps like KakaoTalk outside of cryptocurrency exchanges. The token has gained enough traction to spur the emergence of dedicated apps that facilitate these peer-to-peer trades, charging fees for their services. Based on the size of the chat rooms and apps involved, it is estimated that approximately 3,000 participants are trading the token, according to a report by local news website Etoday.As per another coverage by the same outlet, the Virtual Asset Inspection Division of the Financial Intelligence Unit (FIU), which operates under the FSC, has inquired with local crypto exchanges on two occasions — once in September and again this week — about whether they have listed or are planning to list the BTCMobick token. It’s rare for the financial authority to specifically target a particular token when making inquiries with crypto trading platforms.Potential price manipulationAn FIU official explained the rationale behind the agency’s inquiry into crypto exchanges. The official stated that the probe aimed to caution the exchanges about potential price manipulation of the BTCMobick token. The concern is that many crypto users might suffer losses if such a token, which has been experiencing a continual rise in price outside of trading platforms, were to be listed. Currently, legal penalties for cryptocurrency price manipulation fall under the Virtual Asset User Protection Act, which will not be enforced until July 2024. This indicates a regulatory gap in the immediate term.Hwang Suk-jin, a professor at Dongguk University’s Graduate School of International Affairs and Information Security, pointed out that while giving out privately generated tokens to friends or acquaintances doesn’t raise any legal issues, the situation changes once these tokens are listed for trading on exchanges and distributed more broadly in the market. In such scenarios, these tokens can become a source of legal disputes, he explained.Amidst these developments, there are circulating rumors suggesting that BTCMobick is on the verge of being listed on exchanges. An industry insider has mentioned that there are brokers actively spreading these rumors, indicating that the token might soon become publicly tradable.Oh Tae-min’s denial of rumorsMeanwhile, Oh Tae-min, the creator of BTCMobick who has been distributing his token for free, states that the token is part of an experiment intended to mimic the early stages of Bitcoin. However, critics are concerned that the personally issued token has no practical utility. Addressing the circulating rumors about the token’s potential listing on exchanges, Oh asserts that these rumors are baseless and false. He further warns that any brokers spreading such rumors are likely engaging in fraudulent activities.

Crypto exchange platform Crypto.com and Triple-A, a company that enables businesses to pay and get paid in digital currencies, both Singapore-headquartered entities, have entered into a partnership to enable direct crypto payments. Simplifying crypto paymentsCrypto.com set out details of the partnership in a press release published to its website on Nov. 21. The firm stated that its partnership with Triple-A will give its global customer base “access to a diverse range of new global merchants.” The duo have set out to simplify crypto payments for both merchants and users alike. Crypto.com users will shortly be enabled in making purchases from a range of e-commerce brands directly, using crypto held in their Crypto.com wallets. Through Triple-A’s input, Crypto.com users will be spared the need to manually convert digital assets to fiat currency before making purchases. Furthermore, users won’t incur a fee for any conversion that takes place behind the scenes.Photo by David McBee on PexelsCashback rewardsOnce launched, with the service initially planned to launch in Singapore before further rollout elsewhere, Crypto.com users will also be in a position to benefit from rewards. Eric Anziani, the company’s president and chief operating officer (COO), spoke to this element of the offering, stating: “Partnering with Triple-A enables us to do this by expanding crypto payments to a range of popular brands, creating a seamless shopping experience and providing an opportunity to earn cashback rewards to make spending crypto even more rewarding.” Volatility protectionAs part of the solution that has been put in place, Triple-A will ensure that merchants aren’t exposed to cryptocurrency volatility in accepting crypto as a payment method. The payments they receive from customers are instantly converted to their local fiat currency, with settlement occurring one day following the transaction. This approach also means that merchants don’t have added difficulties in terms of the tax treatment of cryptocurrencies, their management or related reporting requirements. With that in mind, Eric Barbier, CEO at Triple-A, said that the approach “allows merchants to provide Crypto.com users with an optimized digital currency payment user journey.” Anziani said that Crypto.com is trying to “push boundaries when it comes to integrating crypto payments into real-world scenarios and enhance shopping experiences for [its] users.”  In recent weeks, Crypto.com has been active in pursuing a number of initiatives in order to expand its reach. Earlier this week, the company launched a visa card in Latin America, enabling users within the region to earn rewards on purchases made via the card. On Nov. 14, it emerged that the company had acquired Australia-regulated brokerage firm Fintek Securities. It’s understood the acquisition was made in order to expand the range of financial products that Crypto.com can offer to its customer base. At the end of October, Watchdog Capital, a U.S. Securities and Exchange Commission (SEC)-registered broker-dealer, was acquired by the company.  Like many high profile crypto firms, Crypto.com has had its difficulties with regulators. Following the receipt of a Wells notice from the SEC earlier this year, the company responded by filing a lawsuit against the commission, alleging that the SEC had engaged in regulatory overreach in classifying crypto assets as securities.