LG CNS to leverage blockchain for digital transformation in New York City

South Korea’s Financial Supervisory Service (FSS) has initiated on-site consultation services for virtual asset businesses to help them comply with the upcoming Virtual Asset User Protection Act (Virtual Asset Act), which is set to be effective in July. This news was reported yesterday by local media outlet News1. Photo by Hunters Race on UnsplashSupporting VASPs in preparation for the Virtual Asset ActThe consultation services offered by the FSS are fundamentally different from the on-site inspections that have been conducted by the Financial Intelligence Unit (FIU).  Until now, the FIU has been conducting on-site inspections to ensure virtual asset service providers (VASPs) have adequate anti-money laundering (AML) systems in place and comply with the Act on Reporting and Using Specified Financial Transaction Information (the Financial Transaction Information Act). While the FIU has been tasked with conducting inspections, the FSS’s latest on-site consultation services are dedicated to supporting businesses in developing new monitoring systems, which would enable them to prevent unfair transactions ahead of the implementation of the Virtual Asset Act. The FSS has already begun providing consultation services, with the local crypto exchange Upbit being its first client last week. An insider of FSS stated that the schedule for the on-site consultation will be arranged in advance for those seeking the service.  Demand for new FDSDuring a roundtable meeting with VASP CEOs held on Feb. 7, Lee Hyun-deok, the director of the Virtual Asset Regulatory Bureau under the FSS, emphasized the importance of coming up with a new fraud detection system (FDS) specifically designed to block unfair transactions. Most of the current FDSs within local crypto exchanges are focused on AML.  Unlike the Financial Transaction Information Act which mainly focuses on AML, the Virtual Asset Act focuses on punishing unfair trading practices that exploit abnormal price fluctuation or undisclosed information. The FSS recommends that VASPs implement a new system preventing such practices by April, as the Virtual Asset Act’s enactment is just around the corner.  An FSS insider said there is a high chance that VASPs will get the consultation service multiple times on various themes since a lot has to be done before the Act takes effect in July, adding that this consultation is to encourage VASPs to comply with the law rather than to conduct inspections on them. 

In a recent report, Circle Internet Financial, the issuer of the USDC stablecoin, emphasized the growing adaptability of the Asian population towards digital currencies. This trend indicates a substantial potential for increased stablecoin usage in the Asia Pacific region. On Monday, the firm published "The State of the USDC Economy 2024 Report," providing a trove of relevant and timely data. Since its launch in 2018, the USDC stablecoin has facilitated over $12 trillion in blockchain transactions. The focus of the report is on the surge in remittances flowing into Asia, highlighting its growing presence. Remittances of $130 billion into AsiaAccording to a World Bank press release, remittances to Asia reached $130 billion in 2022, with the average cost of transferring $200 standing at 5.7% in the last quarter of the year. Meanwhile, the region accounted for 29% of all global digital asset value received, surpassing North America's 19% and Western Europe's 22%. Against this backdrop, the report sheds light on Circle's strategic partnership with Coins.ph, a crypto exchange in the Philippines, which aims to tap into the country's personal remittance demand, estimated at around $36 billion annually.  In another blog post, the company also dispels the notion that stablecoins are primarily used for speculative trading, citing a 90% decline in such activities over the past five years. This shift in usage patterns highlights the growing acceptance and adoption of stablecoins for practical applications like remittances and trade finance.Photo by Marjan Blan on UnsplashIncreasingly important role in trade financeImportantly, Circle asserts that USDC can play a role in closing the region's $510 billion trade finance gap. This gap represents the lack of liquidity available to companies for cross-border remittances and credit, particularly affecting emerging markets with capital outflow restrictions. The report underlines how businesses in these markets often struggle to secure funding for international trade, and USDC is emerging as a solution. One notable case study is Taipei-based XREX, which utilizes USDC to build financial pipelines between countries, leveraging the deep dollar liquidity in Taiwan to address the dollar scarcity in other Southeast Asian economies. This exemplifies how stablecoins like USDC are contributing to bridging financial gaps and facilitating international trade in regions with limited access to traditional banking services. Stablecoin-specific regulationThe regulatory landscape in the Asia-Pacific region is also evolving to accommodate stablecoins. Countries like Singapore, Hong Kong and Japan have implemented or proposed frameworks for stablecoin regulation, aligning with the growing importance of digital assets in the financial ecosystem. Circle has become increasingly active within the APAC region. In November, the firm joined forces with Japanese financial services conglomerate SBI Holdings to increase the circulation of USDC within Japan. Having been awarded a Major Payments Institution (MPI) license in Singapore in June, Circle followed that up later in the year by launching a zero-fee USDC minting facility within the city-state. Considering these developments, the Asia-Pacific region, with its large unbanked population and significant digital wallet usage, is predicted to witness quick adoption of stablecoins for cross-border payments.

Fingerlabs teams up with Metaclub to gather users for Web3 membership platformFingerlabs, a subsidiary of South Korean digital marketing company FSN, has decided to collaborate with reward points app Metaclub to expand user engagement for its Web3 membership platform Bling, according to an official press release on Wednesday (KST).Photo by NordWood Themes on UnsplashInnovating rewards systems and digital marketingMetaclub is a lifestyle platform that allows users to accumulate and spend reward points that can be used at various brands and websites. It currently boasts 80,000 members and hit a cumulative transaction value of KRW 30 billion (approximately $22.7 million) within a year after its launch. On the other hand, Bling is a marketing solution that allows businesses to create and manage NFTs that offer membership benefits to their customers. Users can create customizable characters on Favorlet, Fingerlabs’ NFT wallet and customer management service, using clothing or accessories called “parts.” These parts are linked to various benefits offered by Fingerlabs’ partner firms.Unique membership experienceThrough this collaboration, Bling and Metaclub are holding a promotional event where users who fill their Metaclub account with more than KRW 200,000 and collect Metaclub parts NFTs on their Bling account will be eligible to receive 3% in reward points.“By working with Metaclub, which has a high number of users in their 20s and 30s, we believe that Bling can quickly establish itself as a next-generation Web3 membership service,” said Kim Dong-hoon, CEO of Fingerlabs. “We have a clear understanding of the features and capabilities of both platforms, so we will be able to build our membership base through various collaborative projects.”