Sony Network Communications and Startale Labs to Launch Joint Blockchain Venture

Indonesia witnessed a striking decline in cryptocurrency tax revenue for the year 2023, according to local media. 63% decreaseA report by Indonesian business and financial publication Kontan detailed a tax take drop to $31.7 million (Indonesian rupiah 467.27 billion). That tax collection is in sharp contrast to the partial collection period in 2022 when the crypto tax regime was initially introduced. It represents a drop of around 63%. The decline is part of a broader tax reform targeting the "digital economy" implemented in 2022, with the Indonesian government expressing the expectation that the reform would enhance tax collection, fostering a "healthy and fair taxation system."Photo by Nick Agus Arya on UnsplashDeclining transaction volumesDespite bitcoin's impressive surge of approximately 160% throughout 2023, the dip in crypto tax revenue was notable. The decrease is closely tied to a drop in transaction volumes over the same period compared to 2022. A report by CoinDesk Indonesia last week put that trading volume decrease at around 60%. Crypto transactions in Indonesia face dual taxation – a 0.1% income tax and a 0.11% value-added tax (VAT). Additionally, local crypto exchanges are subject to a special tax of approximately 0.04%, contributing to the national digital asset bourse. Disadvantaging local exchangesLocal exchanges in Indonesia, including prominent ones like Indodax, have voiced discontent with the high tax rates, contending that these levies are driving users towards unregulated offshore exchanges. Earlier this month Indodax CEO Oscar Darmawan called on the Indonesian government to review crypto tax rates. Darmawan highlighted that the cumulative taxes on crypto transactions often surpass the trading fees paid by users, posing a risk of users seeking more cost-effective alternatives. Local exchanges suggest that crypto transactions should only be subject to income tax, eliminating the VAT component. This proposal comes as Indonesia's Financial Services Authority (OJK) prepares to implement cryptocurrency regulations in early 2025. The aim is to align the taxation of cryptocurrencies with their market nature, possibly redefining them more as securities than commodities. Inadequate tax regulation can lead to a decline in local market activities, potentially resulting in capital flight to more favorable jurisdictions. Indonesia's situation serves as a reminder of the crucial need for policies that understand and adapt to the dynamic nature of the cryptocurrency sector. India is being similarly challenged. Local exchanges there have also complained of punitive taxation, which resulted in Indian users migrating to offshore exchanges. That scenario led indigenous exchanges to lobby the government to take action. The authorities have duly acted, flagging a number of global exchanges for operating illegally within India. It’s not all bad news for the development of digital assets within Indonesia. The country still ranks highly in terms of crypto adoption within the Asian region. Crypto was also floated as an election issue recently by Gibran Rakabuming Raka, a vice-presidential candidate in the upcoming election. The politician expressed his commitment to accelerating the country's position as a leader in the digital revolution. 

China’s Jiangsu Province Integrates Digital Yuan Into Education SystemChina has taken a raft of measures to try to build momentum in its digital currency, the digital yuan or e-CNY, with the latest step being an expansion into the education system in Jiangsu Province.Photo by Kimberly Farmer on UnsplashChina’s digital yuan is a legal tender fully backed by the People’s Bank of China (PBOC) and pegged to the renminbi. Unlike most cryptocurrencies, it is not decentralized or anonymous but is monitored by the PBOC. While adoption has been slow, China has been first off the blocks in developing a central bank digital currency (CBDC) to the point of some level of active use by comparison with its international peers.Enforcing a payments use caseJiangsu Province will attempt to establish the use of the digital yuan in its education system by the end of 2025, according to the Jiangsu Education Department. By the end of the year, students studying within the province are likely to be paying tuition fees using the digital currency. The pilot plan that Jiangsu administrators within the province’s Education Department have put together also aims to establish a means through which examination registration fees will be paid in digital yuan, while scholarships will be received in the digital currency.Zhou Maohua, a researcher with Beijing-headquartered Everbright Bank, told China Daily that it is imperative that more users are registered and go on to actively use the digital yuan to further its development.“The establishment of infrastructure for the digital yuan should be further accelerated,” said Maohua. “Its software and hardware must be upgraded to improve user experience. The security and reliability of the system must also be strengthened,” he added.Over the course of the past three months, four million digital yuan accounts have been opened by ordinary citizens within Jiangsu Province. Total e-CNY transactions have reached a level in excess of 200 billion yuan ($29 billion).Multiple initiativesIn April, the administrators of the city of Changshu, which is situated within Jiangsu Province, announced that it was gearing up to commence paying state employees within the city in digital yuan. Around the same time, officials within the city of Xuzhou, also located within Jiangsu Province, announced that they were in the process of publishing a pilot scheme which will set out a means for promoting China’s e-CNY digital currency.If that was enough in proving Jiangsu’s commitment to furthering the development of the e-CNY, another Jiangsu Province city, Suzhou, was one of the first locations in China to run a digital yuan pilot scheme in April 2020.Earlier this month, it was revealed that the French international banking group, BNP Paribas, had partnered with the BOC in enabling an initiative to promote the use of the digital yuan among its corporate clients.China is working with other countries on a Multiple CBDC Bridge project to explore the feasibility of cross-border fund transfers among different currencies. Launching its own CBDC for cross-border transfers may allow China to reduce its reliance on the US dollar and increase its influence over global trade and monetary policy.

Ripple Labs, the American technology company that developed and supports XRP and the XRP Ledger (XRPL), has partnered with Japan’s Web3 Salon initiative, while in a separate development, the company is also funding crypto-related academic research within the Asia-Pacific (APAC) region.Photo by Moose Photos on PexelsDriving Web3 adoption in JapanIn a statement published to its website on June 9, the company outlined that it has partnered with Japan’s Web3 Salon project, a Web3 initiative with the objective of educating businesses and developers, nurturing blockchain startups and driving Web3 adoption through the provision of startup incubator programs and running hackathons and workshops.One of Japan’s most active Web3 projects, Web3 Salon has the backing of the Japan External Trade Organization (JETRO). The project has also collaborated with a range of Japanese Web3 startups, Asia Web3 Alliance Japan (AWAJ), institutional investors and venture capital firms, as well as a number of key industry stakeholders. Grant fundingAs part of its involvement in this collaboration, Ripple will provide grant funding of up to $200,000 to Japanese startups who have developed their projects on XRPL. Ripple’s grant funding forms part of its broader initiative to finance XRPL-related startups in Japan and Korea. Earlier this month, it confirmed that it had established the XRPL Japan and Korea Fund for this purpose.  At a broader level still, Ripple said that this latest funding commitment also falls under its one billion XRP commitment. Back in 2022 the company committed one billion XRP to advance XRPL ecosystem projects. Christina Chan, Senior Director of Developer Growth at Ripple, commented on the development, stating:“Ripple is proud to collaborate with Web3 Salon to unlock new opportunities in Japan’s thriving startup ecosystem. Together, we hope to fuel innovation and support the next generation of leaders.” Supporting APAC university researchIn a separate blog post published to its website on June 10, Ripple outlined that it was committing $5 million in funding within the APAC region as part of its University Blockchain Research Initiative (UBRI). The funding will cover blockchain-related academic research projects in Japan, South Korea, Singapore, Taiwan and Australia. $1.1 million has been allocated to South Korea’s Korea University in funding that will be released over a six-year period. The funding builds on another relationship that had already been established with Yonsei University via the UBRI in 2024. Equally, Japan’s Kyoto University had engaged with the UBRI last year. That support is now being renewed while funding is also being allocated to the University of Tokyo. The two institutions will be able to avail to funding in excess of $1.5 million.Other APAC region educational institutions to benefit include the National Kaohsiung University of Science and Technology (NKUST) in Taiwan, the National University of Singapore (NUS) and Nanyang Technological University (NTU) in Singapore and the Australian National University (ANU) in Australia.’An epicenter of digital finance’Ripple called APAC “an epicenter of digital finance.” Expanding further on that assertion, it stated that the region has shown “an appetite for experimentation and boasting thriving communities for builders.” Consequently, it views the APAC region as a leader in payment technologies and digital asset adoption.