KDIC Seizes Crypto from Debtors Linked to Losses at Financial Firms

China’s former central bank governor has warned that speculation in stablecoins could threaten financial stability, Bloomberg reported, citing a post from the Beijing-based think tank CF40 Research. His remarks run counter to calls from some economists and industry figures for a yuan-backed stablecoin as the U.S. advances its digital-asset policy agenda. Zhou Xiaochuan, who led the People’s Bank of China (PBOC) from 2002 to 2018, delivered the comments at a closed-door meeting in mid-July. He argued that China’s payment rails—spanning third-party platforms, the central bank digital currency (CBDC), digital wallets, and clearing infrastructure—are already highly efficient, leaving little scope for stablecoins to deliver meaningful cost savings. He also rejected the premise that conventional cross-border payments come at steep costs. Zhou identified price manipulation driven by speculative trading as the chief risk to financial and asset markets, adding that current safeguards in the U.S., Hong Kong, and Singapore remain inadequate.Photo by Mitchell Luo on UnsplashOnshore controls push yuan stablecoins offshoreAny debate over a yuan-linked token must also contend with China’s currency structure. The onshore yuan (CNY) is subject to strict capital controls and limited cross-border convertibility, while the offshore yuan (CNH) trades more freely. As a result, any prospective yuan stablecoin would likely reference the CNH; pegging directly to the CNY would conflict with Beijing’s capital rules. An earlier Reuters report has indicated that Beijing is weighing whether to authorize a yuan-pegged stablecoin to promote international use of the currency. Analysts caution that such a token would almost certainly be confined to offshore markets, even if regulators proceed. U.S. sets federal guardrails for stablecoinsMeanwhile, policy moves in the U.S. are gathering pace. In July, President Donald Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act into law, creating a federal framework for stablecoins. A White House fact sheet says the law requires issuers to maintain 100% reserves in liquid assets such as U.S. dollars or short-term Treasuries and to publish monthly disclosures on reserve composition. The administration has argued that dollar-backed stablecoins could bolster demand for Treasuries and reinforce the dollar’s reserve-currency role. Hong Kong has emerged as comparatively receptive to digital assets. The special administrative region’s Stablecoins Ordinance entered into force on Aug. 1, establishing a licensing regime to oversee Hong Kong dollar–backed stablecoins. Earlier this month, CMB International Securities, a subsidiary of China Merchants Bank, became the first Chinese bank-affiliated institution to offer trading in Bitcoin, Ethereum, and Tether (USDT). Industry voices are also pressing the case for stablecoins. At the WebX conference in Tokyo on Aug. 25, Binance co-founder Changpeng Zhao (CZ) argued that CBDCs are becoming obsolete, while stablecoins—typically backed by real assets—enable wider transactions and are gaining market traction. He said CBDCs remain rarely implemented due to limited demand and suggested China appears more open to stablecoins after years of tighter oversight, pointing to Hong Kong’s efforts to build an ecosystem. Potential PBOC stimulus may lift cryptoChina remains a consequential force in global crypto markets. A recent report suggested that potential PBOC stimulus could fuel an altcoin rally. With China accounting for 19.5% of global GDP, shifts in its monetary stance are seen as important drivers of worldwide liquidity. Following July data showing a 0.1% month-on-month decline in retail sales, a 0.4% rise in industrial production, and an uptick in unemployment to 5.2%, analysts expect measures to support growth. Any additional liquidity could flow into risk assets, including cryptocurrencies, potentially pushing digital tokens toward new highs. 

WEMIX PLAY Launches NFT Auction ServiceWEMIX PLAY, the global blockchain gaming platform operated by South Korean gaming publisher Wemade, has officially launched its non-fungible token (NFT) auction service dubbed “Drops”.Photo by Choong Deng Xiang on UnsplashNFT biddingDrops will serve as a platform for auctioning game NFTs and special NFTs, catering to the growing demand for unique digital collectibles. Auctions on Drops will follow an English auction format where the highest bidder wins, which is also used on NILE, a decentralized autonomous organization (DAO) and NFT platform based on the company’s decentralized blockchain network WEMIX3.0. Users can participate using WEMIX dollars (WEMIX$), the official stablecoin issued on the WEMIX3.0 mainnet.The first three games to launch NFTs on Drops are Melting Earth, Ballies, and Yield KingZ. Melting Earth collections are currently available for sale online, and the latter two will be released soon, according to WEMIX PLAY.Revolutionizing GameFiThe company’s introduction of Drops reflects the growing popularity and value of NFTs within the gaming world, providing gamers and collectors with an opportunity to acquire unique and rare in-game assets through an accessible and transparent auction platform, thus offering a more interactive gameplay experience while leading innovation in the gaming finance (GameFi) sector.

Socket Protocol Raises $5M in Strategic PartnershipSocket Protocol, an interoperability protocol founded by Indian duo Rishabh Khurana and Vaibhav Chellani, has raised $5 million with the strategic investment coming from Coinbase Ventures and Framework Ventures.Despite the ongoing bear market, cross-chain protocols like Socket have continued to attract substantial investment, underlining the growing belief in a future where different blockchains seamlessly connect.Photo by Towfiqu barbhuiya on UnsplashMore than just fundingSocket Protocol, designed to enhance communication between various blockchains, secured this funding to further its collaboration with Coinbase. The firm articulated the nature of the funding and that collaboration on X (formerly Twitter) on Wednesday.The partnership aims to create bridging opportunities for developers and users of Coinbase Wallet and Base, Coinbase’s recently launched layer-2 network built on Ethereum. Socket explained that there is already evidence of that collaboration, borne out by a bridging feature that has already been built into Coinbase Wallet, and powered by Socket Protocol.In relation to the newly launched Base network, the project stated: “We are also helping developers and apps expand to Base with a seamless onboarding experience. Rainbow Wallet, Layer3, Bungee, Zapper & more apps leverage Socket to get their users onboarded to Base already!”As the cryptocurrency ecosystem witnesses the emergence of new layer-2 networks or “rollups” and the continuous expansion of layer-1 blockchains, Socket Protocol positions itself as a critical player in connecting these fragmented ecosystems.Seamless cross-network communicationThe protocol’s primary goal is to facilitate communication between different blockchains, allowing them to interact seamlessly. By offering a bridge for assets, Socket Protocol simplifies cross-network transactions, effectively making the experience akin to operating on a single unified blockchain.Socket boasts that since the launch of the project, it has facilitated over 2.5 million cross-channel transactions, accounting for $3.5 billion in value transfer, while claiming that this is just the starting point, with the project aspiring to grow past that milestone going forward.The recent fundraising highlights the increasing interest in interoperability solutions like LayerZero, as investors recognize the significance of bridging for the future of blockchain technology. Notably, inter-bank messaging system Swift revealed experiments involving the transfer of tokenized value across various private and public blockchains, with Chainlink’s Cross-Chain Interoperability Protocol playing a pivotal role in these experiments.Socket Co-Founder Chellani emphasized the importance of scalable solutions for the future. He noted that “rollup-to-rollup communication is really important” for achieving scalability, aligning the scaling future with the concept of a multi-chain or cross-chain future. “I think the scaling future, and the multi- or cross-chain future are the same thing,” he added.This investment in Socket Protocol, coming at a time of market uncertainty within the crypto space, reflects the growing confidence in the potential of blockchain interoperability to unlock new possibilities and create a more interconnected blockchain landscape.