Harvest Global to establish fixed income tokenized fund

The Japanese Financial Services Agency (FSA), a government body that oversees banking, securities and the digital assets market in Japan, is gearing up to approve the country’s first stablecoin pegged to the yen. Local media platform Nikkei reported on Aug. 18 that it is anticipated that the FSA will approve the issuance of the JPYC stablecoin in the coming months.Photo by Dayo Adepoju on UnsplashEfficient payment infrastructureJPYC, Inc. was founded by Noritaka Okabe in 2019, establishing the JPYC yen-pegged stablecoin in 2021. Okabe believes that the company can better enable innovation in Japan through a more efficient payment infrastructure that JPYC claims to provide via its stablecoin. Prior to launching the stablecoin, JPYC had entered into proof-of-concept and regulatory discussions with the FSA. The JPYC stablecoin has almost complete market dominance within its domestic market, with stablecoins to the value of 30 billion yen ($202.7 million) having been issued. In 2022, JPYC registered with the FSA as a third-party prepaid payment instrument service provider. It’s understood that the company will seek registration once again within the month, this time as a money transfer business. Japan’s Payment Services Act recognizes the issuance of stablecoins by banks, trust companies and money transfer businesses. JPYC backs its stablecoin with liquid assets such as Japanese government bonds and bank deposits. Growing stablecoin importanceOn a global basis, the leaders in terms of stablecoin market capitalization are Circle (USDC) and Tether (USDT), both U.S. dollar-pegged stablecoins. The U.S. recently enacted its GENIUS Act stablecoin legislation with many politicians and market commentators taking the view that USD-pegged stablecoins will promote ongoing use of the U.S. dollar internationally.U.S. Treasury Secretary Scott Bessent took to X on Aug. 18 on that topic, stating:”Stablecoins will expand dollar access for billions across the globe and lead to a surge in demand for U.S. Treasuries, which back stablecoins.”Foreign governments are starting to see the significance of supporting stablecoins pegged to their country’s sovereign currency. The ongoing development of U.S. dollar-pegged stablecoins has not escaped the attention of Chinese officials. In July, government officials in Shanghai held a meeting to explore policy strategies for stablecoins. The same month, Darryl Chan, Deputy Chief Executive of the Hong Kong Monetary Authority (HKMA), said the authority was likely to issue its first stablecoin license in early 2026. His comments preceded the rollout of Hong Kong’s stablecoin regulatory framework on Aug. 1. Last week, JPYC’s Okabe said that JPYC would soon start "buying up Japanese government bonds.” He added, “The interest rates on government bonds in countries where stablecoin issuance does not grow will likely continue to rise. It’s no exaggeration to say that the interest rates on Japanese government bonds rest on JPYC’s shoulders.” Okabe is also going out of his way to draw a clear distinction between his company’s stablecoin and cryptocurrency. On X, he stated that “JPYC is an electronic payment method, not a cryptocurrency.” He went on to assert that given that the JPYC stablecoin is a currency-denominated asset whose value is linked to fiat currency, it incorporates the best qualities of both digital cash and deposits.

Bithumb records declining performance in Q3 amid market challenges and interest rate hikesBithumb Korea, the operator of the South Korean cryptocurrency exchange Bithumb, reported an on-year decline in performance compared to last year, driven by deteriorating market conditions. According to data from the Korean Financial Supervisory Service on Tuesday (local time), the exchange recorded a net loss of KRW 10.6 billion (approximately $8.1 million) and operating losses of KRW 650 million in Q3. Its revenue amounted to KRW 32.4 billion, a 53% decrease from the same period last year.Photo by Алекс Арцибашев on UnsplashFalling figuresBithumb had recorded KRW 28.8 billion and KRW 32.6 billion in operating and net profits, respectively, in Q3 last year, but both of these figures turned into a deficit for the same period this year.This worsened performance can be attributed to weakened investor sentiment amid the U.S. Federal Reserve’s ongoing interest rate hikes and a decrease in trading volumes.However, just last month, these conditions have begun drastically improving as excitement mounts for the potential approval of a spot bitcoin exchange-traded fund (ETF).Murky futureNevertheless, concerns about Bithumb’s profitability in Q4 are arising following the exchange’s zero trading fee policy that it implemented last month in a bid to regain its market share, especially because the primary source of revenue for crypto exchanges is trading fees. Bithumb had previously charged trading fees of between 0.04% and 0.25%.“We will do our best to enhance the competitiveness of our services to boost our market share,” Bithumb said. “At the same time, we will enhance the transparency of our operations through efforts such as our recent preparations for an initial public offering (IPO) and improvements in corporate governance.”The exchange’s upcoming IPO is part of efforts to be listed on Korea’s KOSDAQ stock exchange by 2025, which would make it the first virtual asset company to do so. It had previously considered preparing for an IPO in 2020 but suspended plans due to a lack of clear regulations for virtual assets. But with the upcoming Virtual Asset User Protection Bill set to take effect next July, Bithumb decided that the current regulatory landscape would be conducive to an IPO.Should it take effect, this IPO is also expected to pose a challenge to Upbit, which currently holds over 80% of the country’s market share. However, there is still a considerable amount of uncertainty shrouding this development, as financial authorities are maintaining a wary stance towards virtual assets.

Malaysia Looking to Wean Itself Off Dollar DependencyAccording to Prime Minister Anwar Ibrahim, China is willing to engage in discussions with Malaysia regarding the creation of an Asian Monetary Fund. This proposal, which has been circulating for decades, aims to decrease the dependence on the US dollar.©Pexels/Sergei StarostinAsian Monetary FundAnwar highlighted the necessity to minimize reliance on the dollar and the International Monetary Fund and proposed the establishment of this fund at the Boao forum in Hainan last week. He stressed that the fund would aid in diversifying the financial landscape of Asia and improving its resilience against economic challenges.Following a state visit to China last week, Anwar stated that “there is no reason for Malaysia to continue depending on the dollar.” The Prime Minister told the Malaysian parliament on Tuesday that China’s President Xi Jingping was receptive to the idea of an Asian Monetary Fund and welcomed further discussions on such a proposal.Anwar Ibrahim, serving as both the Finance Minister and Prime Minister of Malaysia, stated that the country’s central bank is already taking measures to allow for negotiations between Malaysia and China using their respective currencies, the ringgit and renminbi.The robustness of the US dollar poses a significant challenge for Malaysia and other Asian countries, particularly as Malaysia is a net importer of food. In September 2022, the Bloomberg dollar index reached an all-time high, leading to a decline in the value of the ringgit and other Southeast Asian currencies to levels not seen in decades.As a result, Anwar Ibrahim’s proposal for a shift towards bilateral trade negotiations with China using the ringgit and renminbi holds the potential to alleviate some of the region’s dependence on the dollar and reduce the impact of its fluctuations.International shift away from dollarThis development comes as other officials in the region, particularly Singapore, have been discussing strategies to manage the effects of a dominant US dollar that has weakened local currencies and been used as an instrument of economic power by the United States.There has been a raft of deals struck in recent weeks all pointing towards an international shift away from the US dollar as the global reserve currency. Russia has agreed with China to trade in renminbi. A major trade deal was struck recently between China and Brazil that will see the two countries trade in reals and renminbi. Major oil producer Saudi Arabia has made similar soundings and signed similar deals with Beijing.Bitcoin as a reserve currencyAll of this recent upheaval has brought further consideration of bitcoin acting as a reserve currency back into view. It’s expected that even if there is a shift away from the US dollar, the renminbi won’t be capable of acting as a single dominant global reserve currency. Taking to Twitter on Wednesday, Bloomberg Intelligence Crypto Market Analyst Jamie Coutts suggested that bitcoin’s performance in Q1, 2023 marks “a significant milestone in its ascendancy as a potential global reserve asset.”Coutts believes that it marks the first occasion that the leading cryptocurrency has acted as a safe haven asset during a liquidity crisis. Bitcoin remains at an early stage of development. Nobody expects that it could serve as the global reserve currency at this point. However, it is not unreasonable to anticipate it increasingly growing into a role as a reserve currency used for international trade and settlement. Especially so, as issues bubble over relative to banking and a desire to escape the clutches of US dollar domination.