Abu Dhabi Approves M2 for Crypto Services

Coinbase Acquires License to Enhance Crypto Operations in SingaporeUS crypto exchange business Coinbase has reached a significant milestone in its Singapore operations by obtaining a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS).The achievement, announced by the firm via a blog post published on Sunday, represents a pivotal moment for Coinbase as it expands its digital payment token services in Singapore to serve both individuals and institutions. The issuance of the full MPI license comes approximately one year after Coinbase initially received in-principle approval from MAS.Photo by Duy Nguyen on UnsplashEnabling broader service offeringThe importance of this development lies in Coinbase’s ability to provide advanced services, not only to individual traders but also to institutional investors. Hassan Ahmed, the country director of Coinbase Singapore, stressed the significance of this full license, stating that it will play a crucial role in strengthening relationships with stakeholders, especially regulated entities like banks. The regulatory milestone is anticipated to further cement Coinbase’s presence in the institutional finance sector in the region.Coinbase’s commitment to the Singaporean market has been evident in its continuous expansion initiatives. The company established a technology hub in Singapore last year, actively recruiting and training product managers and engineers specializing in Web3 technologies.In May the firm extended its product offering to Singaporean customers, introducing fee-less purchases of the USDC stablecoin and introducing digital asset staking. Meanwhile Coinbase Ventures, the firm’s investment arm, has also demonstrated confidence in the region by investing in more than 15 Web3 startups within Singapore over the past three years.Singapore earmarked for growthSingapore has emerged as the focal point for Coinbase’s Asia-Pacific institutional business, owing to its progressive stance on cryptocurrencies and a robust Web3 ecosystem boasting over 700 Web3 companies. According to Coinbase’s surveys, 25% of Singaporeans perceive cryptocurrencies as the future of finance, and 32% have had some form of crypto asset ownership. These statistics underscore Singapore’s growing importance in the global cryptocurrency landscape.Coinbase’s interest in meeting the demands of the local market is evident with the introduction of funding options like PayNow and the banks’ Fast And Secure Transfers (FAST) service, in addition to the integration of the Singpass onboarding system earlier this year.Despite facing regulatory challenges, including a lawsuit from the US Securities and Exchange Commission (SEC) accusing Coinbase of operating illegally, the exchange continues to explore avenues to grow and expand the business further. In August, Coinbase reported a significant improvement in its financials, with a narrower net loss and higher-than-expected revenue. This performance is reflected in its appreciating stock prices, which have more than doubled in 2023.This move places Coinbase among a select group of just over a dozen firms licensed to offer digital payment token services in Singapore. Last month, institutional investor-focused AsiaNext was officially designated as a Recognized Market Operator (RMO) by MAS. The firm was building on previous success in Singapore, having acquired a Capital Markets Services (CMS) license from MAS in June.That same month USDC stablecoin issuer Circle was awarded a full trading license. Other crypto firms to achieve licensing success in the city-state include Crypto.com and Blockchain.com.

South Korean cryptocurrency-only exchange Cashierest to close its doorsCashierest, a cryptocurrency-only exchange based in South Korea, announced on Monday (local time) that it will be closing its doors. A cryptocurrency-only exchange is a type of trading platform that supports trading of tokens but not fiat currencies. In South Korea, there are only five exchanges — Upbit, Bithumb, Coinone, Korbit and Gopax — that provide trading with the Korean won.As of 11 a.m. KST on Nov. 6, the services for token deposits and new sign-ups have been discontinued. Trading activities on the platform will cease at 11 a.m. on Nov. 13. Additionally, the ability to transfer tokens from Cashierest to other exchanges will end at 1 p.m. on Dec. 22.Photo by Lisa Bresler on UnsplashEarlier layoffs and CEO resignationSpeculation about the potential sale of Cashierest has been circulating since earlier this year, following layoffs and the resignation of its former CEO, Park Won-joon, in July. These events are largely seen as a result of low trading volumes on the platform, which many attribute to its lack of support for trading in Korean won.Lack of fiat support leading to low trading volumeA detailed study by the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC) revealed that, out of 21 Korean crypto-only exchanges, 18 are experiencing a deficit in shareholders’ equity as of the first half of this year. Furthermore, 10 did not generate any revenue from transaction fees.During the same period, the five exchanges that support fiat-to-crypto transactions had an average daily trading volume of KRW 2.9 trillion (approximately $2.2 billion), while the collective daily trading volume for all crypto-only exchanges was just KRW 1 billion. This indicates that the market size of crypto-only exchanges is merely 0.03% of that of their fiat-supporting counterparts.

Bitfinex Forges Strategic Partnership with Zodia CustodyCryptocurrency exchange Bitfinex has formed a strategic partnership with digital assets custodian Zodia Custody to fortify the security of its institutional clients’ assets.The deal struck with Zodia Custody, a subsidiary of the UK multinational banking titan Standard Chartered, aligns with a growing trend within the digital assets sector, one that emphasizes separating asset custody from trading activities. Such a division will result in heightened security measures while better meeting regulatory compliance.Photo by Ketut Subiyanto on PexelsSecuring digital assetsThis collaboration provides an opportunity for institutional clients who maintain accounts with both Bitfinex and Zodia Custody. They can now seamlessly replicate their custodial assets on Bitfinex’s cutting-edge trading platform, all while basking in the security offered by Zodia’s off-exchange settlement solution, aptly named Interchange.With this innovation, the need for actual asset transfers becomes obsolete as the settlement process unfolds periodically on the blockchain. This approach not only ensures efficiency but also provides greater security when interacting with the platform.Industry trendBitfinex’s move towards segregating trading and custodial functions aligns with best practices in the crypto industry but also signifies a wider trend observed among cryptocurrency exchanges as they increasingly adopt a more conventional approach akin to traditional financial institutions.Paolo Ardoino, the Chief Technology Officer (CTO) of Bitfinex, shared the exchange’s perspective, stating:“We are committed to shaping the future of digital market infrastructure and enabling institutional customers to thrive in this space. Working with Zodia Custody is a significant part of that strategy, and together we can look to enable even more institutions to enter or further participate in digital assets.”This partnership serves as a testament to Bitfinex’s continuous efforts to collaborate with reputable custodians, building upon past successful alliances with firms like Koine in 2020 and Digivault in 2022.The significance of segregating asset custody from trading operations has taken on greater importance, primarily in the aftermath of the collapse of FTX, where management gambled with customer’s assets.Zodia’s market expansionZodia Custody, with the backing of Standard Chartered Bank, has recently expanded its footprint into Singapore, offering digital asset custody services to financial institutions in the burgeoning Asian market.Not content with that, in May it launched its crypto custodian service in Dubai. The following month the fledgling firm announced a partnership with blockchain infrastructure firm Blockdaemon relative to crypto staking for institutional clients. There’s been no let up in the firm’s roll-out of services as earlier this month it commenced a yield offering on stablecoins in partnership with Singapore-based DeFi platform OpenEden.Bitfinex’s history includes one of the most infamous hacks in the cryptocurrency sphere, with the pilfering of 120,000 BTC, now valued at over $3 billion. Nevertheless, the exchange has undergone a transformative journey and presently boasts an extensive array of cryptocurrencies and trading pairs.As the regulatory landscape continues to evolve, the practice of separating custody from trading is poised to become a standard procedure, further enhancing the legitimacy and security of the cryptocurrency market.