Taiwan’s FSC plans crypto draft regulations by September

China Launches National Blockchain Center to Develop TalentHaving initially been announced in February, China’s National Blockchain Technology Innovation Center was formally launched on Wednesday. The center is based in China’s capital city of Beijing, and plans to collaborate with existing crypto and blockchain businesses, think tanks that concern themselves with blockchain and digital assets, and local universities in an effort to further advance blockchain technology within China’s borders.Photo by Hanson Lu on UnsplashEnterprise blockchain developmentEncompassed within the National Blockchain Technology Innovation Center lies the Beijing Academy of Blockchain and Edge Computing. The academy’s leading achievement to date has been its development of the ChainMaker blockchain. The state-sponsored blockchain incorporates clusters of high performance servers of 1,000 units or more, and it claims to achieve a throughput of 240 million transactions per second.The blockchain is being geared towards enterprise use, and the sharing of information between businesses. The ChainMaker project team has also developed an immutable storage mechanism called “Hong”. It’s understood that the team plans to open-source that technology in due course. The storage system is being used by around 80 government departments in Beijing to collect and store data.ChainMaker is collaborating with fifty corporations, with most of them being state-owned entities.Linking up separate networksIn these efforts to advance China’s blockchain sector, the Center is being backed by China’s Ministry of Science and Technology. One of its key objectives is to ensure that the research center enables a comprehensive, nation-wide network to link together disparate blockchain systems, including those already built, within China. Furthermore, the Chinese authorities want the Center to support existing industries, serving them by bringing blockchain technology to their operations, and in that way advancing businesses with that added competitive edge.Zheng Zhiming, a leading academic at the Chinese Academy of Sciences said that existing blockchain projects are isolated from each other. Zhiming believes that this is holding them back, impeding their growth. This latest approach through the National Blockchain Technology Center is geared to address that shortcoming.It’s interesting to note that while the Chinese authorities have taken a very hard line in relation to cryptocurrencies, they are very much trying to advance their blockchain sector. Likewise, they are pulling out the stops for China’s central bank digital currency (CBDC) project, the digital yuan or e-CNY.It emerged last week that the Bank of China has partnered with French international banking group BNP Paribas, in an effort to promote further use of the digital yuan among the bank’s corporate clients.A dual strategyMeanwhile in China’s autonomous territory of Hong Kong, the city has been given an implicit mandate from the Chinese central government to open its doors to cryptocurrency-related businesses. Cleverly, the Chinese are covering both eventualities. While they don’t want citizens within mainland China to have access to decentralized cryptocurrencies and dApps, they still don’t want to miss out on any upside that the technology and its innovation may bring.On that basis, Hong Kong has been given the space and freedom to compete for crypto business on a global basis, competing in that respect with other emerging centers such as Singapore and Dubai.

Tether, the issuer of the USDT stablecoin, has teamed up with local partners in the United Arab Emirates (UAE) in order to launch a dirham (AED)-backed stablecoin. In a statement published to the firm’s website on Aug. 21, Tether outlined that the stablecoin is being launched in partnership with Dubai-based technology conglomerate Phoenix Group and Green Acorn Investments, a company that describes itself as “a socially responsible investment firm dedicated to supporting critical sectors and supporting the generation of sustainable wealth and financial literacy.”Photo by DrawKit Illustrations on UnsplashFully backed by AED reservesThe stablecoin issuer outlined that each token will be “fully backed by liquid UAE-based reserves.” Tether further maintained that the back-end management of the new token will adhere to the firm’s “transparent and robust reserve standards,” and that “every Dirham-pegged token is tied to the value of the AED, providing stability and confidence in its value.”  Tether dominates the stablecoin market where USDT accounts for $117 billion, against a backdrop of an overall stablecoin market valued at $169 billion.  Perennial skepticsThe company has perennially faced criticism for a lack of transparency relative to the backing of its USDT stablecoin, given its policy of providing attestation reports instead of fully comprehensive audits from a top-tier auditing firm. One of the firm’s critics, the pseudonymous X account @OccamiCrypto took to the social media platform to provide its reaction to this most recent development, stating: "This Tether UAE stablecoin 'launch' will likely be as real as Tether’s promised audit and real time reserve reporting." The Tether critic went on to claim that the announcement is nothing more than "Tether spin," and that Tether has never attempted to become regulated in any market and that nothing would come of it. Another Tether critic, freelance journalist Jacob Silverman, commented on the development on X, stating:”Russian businessmen in UAE must be rejoicing.” His comment is suggestive of a common assertion that Tether is being used to facilitate the circumvention of sanctions. According to the firm’s press release, it believes that the product will enable users locally to access the benefits of the AED in digital form. The company claims that it will “streamline international trade and remittances, reduce transaction fees, and provide a hedge against currency fluctuations, thus playing a crucial role in the financial ecosystem of the UAE and beyond.” Tether’s partner Phoenix Group has been active in the crypto-sphere in recent times through mining. In December of last year, the company sealed a $380 million deal with Chinese mining equipment manufacturer MicroBT. Earlier that month, the company went public on the Abu Dhabi Securities Exchange (ADX). On face value, this development appears positive. However, UAE-based crypto and blockchain lawyer Irina Heaver recently warned that tightening regulations within the UAE may shut down crypto payments within the country. Heaver specifically cited the use of USDT as being under threat, with the potential for stablecoin-based transactions to be prohibited as new rules are ushered in.  

The Korea Customs Service (KCS) is preparing to establish a dedicated task force to combat the surge in cryptocurrency-related crimes. According to a report by local media outlet Joseilbo, this initiative was deliberated in a meeting chaired by KCS Commissioner Ko Kwang-hyo, specifically convened to discuss strategies against foreign exchange violations. The KCS reported that last year, it uncovered a total of 198 criminal incidents related to foreign exchange activities, with the combined value reaching approximately KRW 1.9 trillion ($1.4 billion).Photo by Mathew Schwartz on UnsplashCrypto involved in 88% of forex violations Of the total amount mentioned, violations of the Foreign Exchange Transaction Act comprised KRW 1.654 trillion, with 88% of these incidents involving virtual assets. This represents a dramatic surge in the involvement of virtual assets in financial crimes, especially when compared to 2020, where crypto-related offenses constituted 3% of the total value linked to forex violations. This trend underscores the rapidly growing role of virtual assets in such illicit activities. To address these issues, the KCS is set to broaden its crackdown on illicit cryptocurrency activities. This crackdown targets practices such as transferring foreign currency overseas to acquire virtual assets for arbitrage trading and using virtual assets to conceal trade payments, thereby attempting to bypass customs duties.Task force’s international collaborationAs part of this initiative, the country's customs agency aims to build a task force focused on tackling crypto crimes. This specialized group will be responsible for gathering and analyzing data, conducting investigations and recommending regulatory enhancements. The task force will collaborate with financial regulators to obtain crypto transaction records from domestic cryptocurrency exchanges. Moreover, it will work with customs authorities of other countries, including Hong Kong, to collect details on crypto transactions conducted abroad.