South Korea’s GDAC Suffers $13M hack

Ant Group, a Chinese financial services conglomerate and affiliate of the Alibaba Group, has plans to acquire stablecoin licenses across Asian markets and further afield. Its Singapore-headquartered global digital payments and financial technology subsidiary, Ant International, plans to file an application for a stablecoin license in Singapore and in Hong Kong once the Chinese autonomous territory implements its stablecoin regulation later this summer.  That’s according to a report published by Bloomberg on June 12, citing unnamed sources familiar with the matter. Beyond the Asia-Pacific (APAC) region, Ant International also plans to seek a stablecoin license in Luxembourg.Photo by Ban Daisy on Unsplash2 Hong Kong stablecoin license applicationsIn a statement, Ant International stated: “We plan to apply for the fiat-referenced stablecoins (FRS) issuer's license once the process is open after the [Hong Kong] Stablecoins Ordinance takes effect on August 1.”Additionally, Bian Zhuoqun, president of Ant Digital Technologies, another Ant Group subsidiary focused on applying digital technologies, confirmed that it too will be applying for stablecoin licensing in Hong Kong.  Zhuoqun told reporters that the company has already opened dialogue with the regulator in Hong Kong, while also participating in a regulatory sandbox. While the company wasn’t a named participant within Hong Kong’s stablecoin sandbox, it had previously participated in Project Ensemble, an initiative run by the Hong Kong Monetary Authority (HKMA) aimed at establishing a tokenization ecosystem in the city. Exploring stablecoin applicationsOn June 10, Ant International and German multinational investment bank Deutsche Bank announced a strategic partnership geared towards establishing integrated cross-border payment solutions to global merchants.  The two firms stated that they would explore tokenized bank deposits while also looking into stablecoin applications for global payments. It highlighted the potential use of stablecoins within Ant companies, facilitating real-time cross-border treasury management, reserve management and on-ramp and off-ramp services. Back in November, Singapore-headquartered StraitsX, a stablecoin-based payments startup, launched a cross-border payments product in association with AliPay+, Ali International’s offshore digital payments platform. A key component of the product offering is the use of the XSGD stablecoin. Hong Kong passed its stablecoin bill last month. Last week, the city’s government outlined that the effective date for the resultant Stablecoin Ordinance has been set for Aug. 1. Under the Ordinance, only licensed institutions are authorized to offer fiat-referenced stablecoins in Hong Kong, while the issuer of such a stablecoin must be licensed in order for it to be offered to a retail investor. Last month, multinational banking and financial services group HSBC launched Hong Kong’s first blockchain-based settlement service, utilizing tokenized deposits for swift transactions. The company collaborated with Ant International, which became the first client of the service. Entering the financial mainstreamA Financial Times report published on June 12 asserted that stablecoins are entering the financial mainstream, a development that “could have profound implications for the global financial system.” Earlier this week, the South China Morning Post (SCMP) reported that Hong Kong’s stablecoin law could lead to a boom in digital assets.Daniel Tse, managing director of Hong Kong brokerage firm Futu Securities, told the SCMP: “We’re seeing a significant trend in investments related to stablecoins on our platform, which highlights the growing importance of this sector.” 

China’s Fuzhou City Offers Incentives to Entice Blockchain Start-UpsAdministrators in Fuzhou city, the capital and one of the largest cities in China’s Fujian Province, have introduced a raft of policies aimed at enticing blockchain-centric companies to establish themselves in the city.Photo by 尧智 林 on UnsplashMonetary rewardsThe measures are understood to include rent subsidies applicable to the use of commercial office space in the city, as well as the payment of cash rewards based on such start-up businesses hitting various revenue targets. The cash reward incentives are being capped at 500,000 yuan, around $71,800 US dollars, for each applicable project.The city administrators are also offering cash rewards to institutions within the city area and local blockchain firms in cases where they attain government-issued certifications. Another category through which these entities can reap more cash rewards is in providing training services centered upon blockchain technology.A blockchain firm basing itself within the city limits that is successful in attaining state certification reflecting its status as a national level laboratory specializing in blockchain technologies may be awarded as much as 1 million yuan ($144,000).Rent subsidiesThree specific industrial locations are applicable where the rent subsidy is concerned. Blockchain-based businesses wanting to avail of that incentive will have access to an annual rent subsidy of up to 600,000 yuan ($86,300) for every 1,000 square meters of commercial office space that they rent.Stepping up activityThere seems to be heightened activity related to various aspects of blockchain-related technology within China’s borders in recent months. It appears that while the country is taking the initiative with blockchain-related technology, that excludes the development of or open market use of decentralized cryptocurrencies.China has been pursuing a policy of pushing cryptocurrency beyond its borders in recent years, to include bans on cryptocurrency exchanges and crypto miners. However, over recent months, it is allowing this segment of the overall blockchain innovation to develop within the autonomous Chinese territory of Hong Kong. In fact, it’s actively encouraging it. It’s quite a savvy move by the Chinese who don’t want their citizens using decentralized cryptocurrency generally but are quite happy to still participate on a global level in that sector, by having Hong Kong make efforts to become a regional crypto hub.A second strand to its overall strategy appears to be a concerted effort to expand the user base within China of the digital yuan, its central bank digital currency (CBDC). A series of initiatives have been rolled out in an effort to bring the CBDC into active use. China remains the global leader in CBDC development, much further along in that process than its international peers.Lastly, it’s strategically pursuing the development of blockchain-related business, just as this initiative in Fuzhou indicates. The local government initiative is not an isolated one. Last Wednesday, China’s National Blockchain Technology Innovation Center was formally launched. As far back as 2019, Beijing-based smart contract platform Trias has been assisting authorities in Fuzhou in utilizing blockchain in an effort to better manage its electrical grid infrastructure.

Crypto.com, the Singapore-based cryptocurrency exchange and digital asset brokerage, announced that it introduced an institutional trading platform in the United States. In a statement published on its website on Jan. 21, the company outlined that U.S. institutional and advanced traders can now access the new platform. The firm believes that the offering complements its retail-facing Crypto.com app., which currently serves the U.S. market.Photo by Joshua Hoehne on Unsplash480 trading pairsThe institutional-grade platform will enable access to over 300 cryptocurrencies and 480 trading pairs. The product is likely to appeal to a similar market segment as those clients targeted by the Crypto.com Custody Trust Company, a digital asset custodian, which was established last month. At that time, Crypto.com co-founder and CEO Kris Marszalek said that launching the digital asset custodian was the latest step on the company’s product roadmap, with a view towards building a business and a market presence within the U.S. and Canada.  Responding to this latest product offering, Marszalek stated: “We took the time to build the best possible product for institutional and advanced users around the world and we are now incredibly excited to fully introduce it in the market we continue to be bullish about – the U.S.” Marszalek added that Crypto.com has invested heavily in the exchange’s technological capabilities and banking rails. The Crypto.com CEO believes that this investment has resulted in exponential global growth for the company, with the platform becoming a leading U.S. dollar-supporting exchange. Regulatory tailwindsCrypto.com’s bullishness regarding the U.S. market currently stands in contrast with developments in June 2023 when the company decided to shut down its institutional exchange offering, citing limited demand amid a bleak market landscape for crypto in the United States.  At the time, the company was one of several to look towards opportunities outside of the U.S. Shortly afterwards, Crypto.com obtained a crypto trading license in Dubai. Competitors Gemini and Coinbase followed a similar strategy, looking at growth opportunities in the Middle East and Asia. It’s clear that a regulatory crackdown in the U.S. at that time curbed the expansion plans of many cryptocurrency platforms. Many industry experts are of the belief that there will be a pro-crypto Securities and Exchange Commission (SEC) in the U.S. as part of the newly seated Trump administration.  Regulatory clarity is necessary for institutional involvement in the digital assets sector. Last week, Mark Uyeda, Acting Chairman of the SEC, announced the formation of a crypto task force with the objective of creating a clear regulatory framework for crypto. The U.S. is home to the world’s largest capital markets. A report produced by New York-headquartered blockchain analysis firm Chainalysis late last year identified that 70% of North American crypto transactions involved transfers that had a value in excess of $1 million, pointing to the level of institutional activity within that market.  Earlier this month, Crypto.com added the ability for U.S. platform users to trade stocks and exchange-traded funds (ETFs).