Philippines Delays Crypto Framework Publication

In a recent announcement on Facebook, Singapore Prime Minister Lee Hsien Loong has raised alarm bells about a new form of cyber scam that exploits deep-fake technology. Deep-fake technologyThe Prime Minister highlighted the emergence of deceptive videos utilizing artificial intelligence (AI) to create false portrayals of him endorsing cryptocurrency scams. This development underscores the escalating sophistication of online scams and the deployment of advanced technology to mislead the public. Deep-fake technology has emerged as a powerful tool for scammers, enabling them to manipulate genuine footage to produce highly convincing yet entirely fabricated content. In the latest incident, a deep-fake video features Prime Minister Lee Hsien Loong endorsing a nonexistent crypto investment platform purportedly associated with entrepreneur Elon Musk. This video, a manipulated version of an interview on CGTN, showcases the concerning level of realism achievable with deep-fake technology. The incident emphasizes the growing trend of utilizing AI in perpetrating scams. Prime Minister Lee underscored the deceptive nature of these videos, articulating the potential damage they could inflict by leading unsuspecting individuals to invest in fraudulent schemes. The Singaporean government maintains a vigilant stance on such scams, consistently urging citizens to exercise caution and verify information from official sources.Photo by Guo Xin Goh on UnsplashPrevious issuesThe exploitation of public figures in financial scams is not a new phenomenon. Prime Minister Lee has been a recurrent target of such scams, dating back to 2018. At that time, the government issued public warnings about Bitcoin investment scams falsely claiming the Prime Minister’s endorsement. More recently, in July, another fake video featuring Lee Hsien Loong surfaced, prompting renewed public warnings. In 2021, the Prime Minister’s name and photograph were used without his consent in an effort to sell cryptocurrency. The data was taken from his X (formerly Twitter) profile. At the time, Lee wrote:“The site’s creators are anonymous, but I have sent an open tweet out to ask that my name and photo be removed from the site immediately, as I have nothing to do with the platform. I urge everyone to remain vigilant when dealing with cryptocurrency platforms.” That was a much less sophisticated identity-related scam. More often than not, scammers and fraudsters tend to be early adopters of technology. That’s proving to be the case with the use of deep-fakes in this instance. A need for cautionAs he did in 2021, Prime Minister Lee has urged the public to exercise caution in light of this more recent incident. He advises against responding to scams promising guaranteed investment returns or giveaways. There’s every sign that the Prime Minister’s warning is warranted. In September it emerged that six Singaporeans lost more than $100,000 when a scammer tricked them into buying tokens on a cryptocurrency trading platform. More recently, five Americans were conned out of $10 million in a scam that involved a spoofed domain of the former Singapore International Monetary Exchange (Simex). This call for public vigilance is part of a broader government effort to address the surge in cyber fraud. These repeated incidents underscore the challenges posed by digital technologies in spreading misinformation and financial fraud.   

Singapore’s MAS gears up for live CBDC pilotThe Monetary Authority of Singapore (MAS) has unveiled plans to initiate a live central bank digital currency (CBDC) pilot for wholesale interbank settlement in 2024.Photo by Sergio Sala on UnsplashMoving beyond simulationThis pilot will move beyond simulation, involving the actual utilization of a live wholesale CBDC for settling payments between commercial banks. Furthermore, MAS indicated that upcoming pilots may extend to leveraging wholesale CBDCs for the settlement of cross-border securities trade.MAS Managing Director Ravi Menon expressed the significance of this move, stating:“The ‘live’ issuance of central bank digital money for use as a common settlement asset in payments is a significant milestone in MAS’ digital money journey that began in 2016. The issuance of wholesale CBDC reinforces the role that central bank money plays in facilitating safe and efficient payments.”Orchid BlueprintThis announcement is a key component of the Orchid Blueprint, a comprehensive plan detailing the infrastructure essential for facilitating the pilot and future developments. In addition to the wholesale CBDC initiative, the Orchid Blueprint outlines the expansion of trials to encompass tokenized bank liabilities and regulated stablecoins, solidifying Singapore’s commitment to fostering innovation in the digital finance space.As part of the Orchid Blueprint, MAS is set to create a settlement ledger to record digital money transfers. This ledger will incorporate features like programmability and atomic settlement of digital tokens. To enhance user experience, a “Name Service” for customer-friendly wallet addresses and name identifiers is on the agenda. Additionally, a tokenization bridge will be developed to connect existing account-based settlement systems with ledgers compatible with tokenized forms of digital money.Purpose-bound moneyThe Orchid Blueprint introduces a “programmability protocol” based on the concept of “purpose-bound money” (PBM). PBM, a concept considered by the MAS in a whitepaper that it published earlier this year, allows for the specification of certain conditions for the use of digital money, enabling automation of transactions and predefined conditions for settlement. This innovative approach empowers centralized planners to define the conditions for usage, bringing a new level of flexibility to the digital financial landscape.This development aligns with the broader trend of increasing institutional interest in digital currencies and blockchain technology. The move towards live CBDC pilots, tokenization and stablecoins underscores Singapore’s commitment to staying at the forefront of financial innovation. As the Orchid Blueprint unfolds, it sets the stage for a dynamic and technologically advanced financial ecosystem, reinforcing Singapore’s position as a leader in the global digital finance arena.In a related move within the region, crypto firm Paxos recently announced plans to launch a new USD-backed stablecoin in Singapore, receiving in-principle approval from MAS to issue the stablecoin. Meanwhile, International Monetary Fund (IMF) Managing Director Kristalina Georgieva outlined in a keynote speech at the Singapore FinTech Festival earlier this week that CBDCs not only could replace cash but also improve financial inclusion.These concurrent developments indicate the growing convergence of traditional financial systems with the expanding digital currency landscape.

As the South Korean capital market eyes the burgeoning potential of security token offering (STO) businesses, Koscom, a financial IT company, is increasingly coming into focus among securities firms for its dedicated STO platform. With four securities companies already in partnership, Koscom is actively seeking to expand its collaboration network further. Koscom is a technology subsidiary of Korea Exchange, the country’s only securities exchange operator.More partnerships with securities firmsAccording to its press release published a few weeks ago, Koscom inked a memorandum of understanding (MOU) with Yuanta Securities Korea, the South Korean branch of the Taiwanese retail broker. Through the partnership, the two entities pledged to collaborate on developing blockchain platforms and discovering new STO projects.  The MOU between Koscom and Yuanta is the fourth STO-related partnership Koscom has inked with a securities company. Koscom's other three brokerage partners are Kiwoom Securities, Daishin Securities and IBK Securities. With over four decades of experience in managing ledgers for brokerages, Koscom is highly skilled in constructing technical infrastructure for the capital market. As the operator of its own blockchain platform, this fintech company has been developing blockchain technology and acquiring relevant expertise.Photo by Shubham Dhage on UnsplashSecurity token issuance and distributionThe necessity for blockchain-based STO platforms provided by companies like Koscom for brokerages stems from regulations set forth by the Korean financial authority. The Financial Services Commission (FSC) mandates that the issuance and distribution of security tokens must be carried out by separate entities. This regulatory framework necessitates a platform that enables securities firms to connect and interact with each other. Koscom offers a joint STO platform designed to streamline transactions between brokerages, improving cost-effectiveness. In light of this, the financial IT company concentrates on developing such platforms with the aim of laying a solid foundation for the emerging STO market. According to local media outlet Etnews, Koscom has set its sights on completing the platform development within the first quarter, with plans to address additional requirements from brokerages subsequently. Striving to expand its network of partnerships to include companies both large and small, Koscom recognizes that a more diverse array of participating firms can enhance the efficiency of token issuance and distribution, which would in turn accelerate the adoption of STOs. Koscom’s strategy offers its partners an opportunity to test its STO infrastructure before the relevant legislation governing the management of security tokens is passed at the National Assembly. Regarding this development, Kim Sung-hwan, Head of the Digital Business Division at Koscom, said, “Koscom’s joint STO platform is emerging as an alternative method for brokerage firms to venture into the security token business. Factors such as costs and workforce requirements have made it difficult for many firms to proceed independently.” He added, “We will provide full technical support for our platform users, allowing them to focus on identifying reliable underlying assets for security tokens.”