Crypto fund manager secures capital markets license in Singapore

The Chinese authorities are reportedly mulling over the possibility of approving the use of stablecoins pegged to and backed by the Chinese yuan. That’s according to a report published by Reuters on Aug. 20, with the publication citing “sources familiar with the matter.”Photo by Eric Prouzet on UnsplashInternationalization of the Chinese yuanChina’s State Council, its cabinet and primary administrative authority, has scheduled a review of yuan-backed stablecoins for later this month, a development that could potentially lead to their approval. The Chinese have been leaders in recent years in the development of a central bank digital currency (CBDC), the digital yuan. The digital yuan was further along in its development than any other CBDC globally, with the Chinese making concerted efforts to bring the digital currency into use at home, with an eye toward global use for international trade. While the U.S. dollar has enjoyed an extended period as the world’s reserve currency, the weaponization of the currency by the U.S., particularly through the application of sanctions, has led BRICS (Brazil, Russia, India, China and South Africa) nations to consider alternatives. One of Reuters sources asserted that the Chinese authorities are now homing in on the potential to internationalize the yuan via stablecoins. Setting the tone for stablecoin useMembers of the Chinese government leadership are expected to establish the tone for stablecoin use following their upcoming review, outlining the parameters within which the Chinese authorities will permit their use. Reacting to this development, Robin Brooks, a senior fellow at the Brookings Institution, asserted that China’s newfound interest in yuan-backed stablecoins is a sign of “how insecure China is in the global financial system.” Brooks added that the way to internationalize a sovereign currency is to promote the rule of law and property rights rather than pursue the use of stablecoins, which he described as “ridiculous.”  Growing global interestWhile the Brookings Institution is not directly backed by the U.S. government, the organization is nevertheless a Washington, D.C.-based think tank. Despite Brooks’ objection to the use of stablecoins, China is not the only nation to show interest in using them.Taking to X, Raphaël Bloch, co-founder of crypto media platform The Big Whale, pointed out that increasingly, nations around the world are embracing stablecoins due to the efficiency of global currency distribution that is possible via public blockchain networks.  Additionally, stablecoins offer an effective means of government debt financing, given that stablecoin reserves are backed by government bonds. In the U.S., President Donald Trump has ruled out the pursuit of a CBDC. Last month, the U.S. House of Representatives passed the Anti-CBDC Act to prohibit the development of a CBDC by the Federal Reserve. Instead, Trump has said that a stablecoin regulatory bill working its way through the legislative system will ensure global dominance for the U.S. in the crypto sector. In June a Deutsche Bank strategist claimed that the legislation would strengthen the U.S. dollar’s global dominance, with several American politicians having since expressed the same view.Earlier this week, Japan’s Financial Services Agency (FSA) signaled that it is likely to approve the issuance of a yen-pegged stablecoin. Meanwhile, the authorities in South Korea are working on a bill related to won-pegged stablecoins.

Crypto custodian Korea Digital Asset (KODA) has seen its custody assets exceed the $6 billion mark, equivalent to about KRW 8 trillion, according to game media outlet Kyunghyang Games.  Established in November 2020 through a collaboration between KB Bank, the blockchain venture capital firm Hashed and blockchain tech company HatchLabs, KODA provides custodial services for crypto assets. A custodial service provider refers to a third-party institution that manages virtual assets on behalf of clients. Several big banks overseas such as Goldman Sachs and Citibank provide asset custodial services. Photo by Chris Liverani on UnsplashA leading provider of crypto asset custodial services Having been offering one-stop crypto asset custodial services for companies and institutional clients since March 2021, KODA has become a notable virtual asset business operator in South Korea with it being registered with the Financial Intelligence Unit (FIU). By the end of June 2023, KODA made up nearly 80% of the local custodial service market share, per FIU data. At the time, out of the total KRW 2.9 trillion in crypto assets held by 49 local custodial service providers registered with the FIU, KRW 2.3 trillion was managed by KODA. By December 2023, KODA announced it was managing KRW 8 trillion in crypto assets, with over 200 custodial wallets and about 50 institutional clients using its services.  Bracing for the potential approval of spot bitcoin ETFs in KoreaThe demand for crypto asset custodial services is expected to rise as Korea’s ruling and opposition parties are pledging to integrate crypto assets into the traditional financial system, leading up to the general election in April. Major political parties are considering the possibility of allowing transactions of spot bitcoin ETFs and legalizing investment in crypto assets by private companies. Cho Jin-seok, CEO of KODA, said that the integration of digital assets into the traditional financial system is an unstoppable global trend that no one can resist, and that KODA will be able to serve as a key crypto infrastructure if the local financial authority approves trading spot bitcoin ETFs.  Kim Seo-joon, CEO of Hashed, stressed the significance of preparing for the potential approval of spot bitcoin ETF transactions, noting how a number of spot bitcoin ETFs were released in the U.S. right after the approval. He added that KODA’s commitment to regulatory compliance and technological expertise would make it an essential partner in introducing virtual asset ETFs to the local market.

Dunamu’s Q1 Revenue Drops 28.6% Amid Global Liquidity ContractionDunamu, the operator of Upbit, a major cryptocurrency exchange in South Korea, announced today the release of its Q1 2023 report.Photo by Tiger Lily on PexelsDeclining revenueAccording to the Data Analysis, Retrieval and Transfer System (DART) of the Financial Supervisory Service (FSS), Dunamu’s consolidated sales revenue for the first quarter of 2023 was 304.8 billion KRW ($231.3 million). This figure represents a 28.6% decrease from 426.8 billion KRW ($323.9 million) recorded during the same period last year. Additionally, its operating income declined by 26.3% to 211.9 billion KRW ($160.8 million) from 287.8 billion KRW ($218.4 million). However, its net income showed an increase of 54.9%, reaching 326.3 billion KRW ($247.6 million).Global liquidity contractionDunamu attributed the decline in revenue to several factors, including the ongoing global liquidity contraction, economic downturn, and reduced investor confidence. These factors collectively impacted the company’s financial performance during the first quarter of 2023. On a positive note, Dunamu linked the net income increase to the recovery and upward movement of digital asset prices in comparison to the previous quarter.Established in April 2012, Dunamu has enjoyed noticeable growth by offering a range of services related to digital assets, securities, and asset management. In recent years, it has been tapping into new technology trends like non-fungible tokens (NFTs) and metaverses to adapt to the era of Web3 and enhancing transaction security and convenience for valuable assets.As a company with a shareholder base exceeding 500, Dunamu has been disclosing its business reports as well as quarterly and semiannual reports since 2022 in line with the Korean Capital Markets Act’s requirements.