Study Places Hong Kong as Leader in Crypto Readiness

Japan plans to require cryptocurrency exchanges to maintain reserves to cover potential losses from hacking incidents, according to a Nov. 24 Nikkei report cited by local outlet New Economy. The measure is designed to ensure that service providers can compensate users in the event of a breach. Authorities are expected to set the reserve level after reviewing past hacking cases and examining how much traditional securities firms set aside. While crypto exchanges are currently required to store customer assets in cold wallets, they are not obligated to maintain any dedicated pool of funds for compensating losses, and the proposed framework is intended to close that gap.Photo by Jen Titus on UnsplashReserve rules mirroring brokerage standardsThe Financial System Council, which operates under the Financial Services Agency (FSA), will finalize a report on the proposal and draft a bill for submission to next year’s regular Diet session. The legislation would amend the Financial Instruments and Exchange Act (FIEA). The FSA is turning to the FIEA because the reserve framework is modeled on existing rules for securities companies, which must maintain designated reserves to compensate clients for losses stemming from errors or other improper activities. These measures follow earlier reports that similar requirements are being considered for third-party custody providers that hold crypto assets on behalf of exchanges. These external custodians have not been directly overseen, but the FSA now plans to require them to report their activities in advance. The push to reinforce customer protections comes as Japan’s crypto market continues to expand. In a sign of that growth, mobile payment platform PayPay last week enabled transfers between PayPay Money balances and Binance Japan. The new feature allows deposits from 1,000 yen, with limits of 1 million yen per 24 hours and 2 million yen per 30 days. Until now, funding or withdrawing from Binance Japan’s spot trading services was limited to yen bank transfers or transactions through external exchanges and wallets. Accumulation grows amid market pullbackJapanese companies have also continued to accumulate Bitcoin. According to Decrypt, Metaplanet, a former hotel operator that now positions itself as a Bitcoin treasury firm, said on Nov. 25 that it plans to use its Bitcoin holdings as collateral for a $130 million loan to purchase additional Bitcoin. The Tokyo Stock Exchange-listed firm currently holds 30,823 BTC and aims to expand its position to 210,000 BTC by 2027. Another publicly traded company, nail-salon operator Convano, has taken a similar approach, recently adding 97.67 BTC to bring its total to 762.67 BTC, according to BitcoinTreasuries.NET. This accumulation has continued despite Bitcoin’s recent decline. The cryptocurrency has fallen nearly 20% over the past month and is now trading just below $92,000. Citing analysis from 10x Research CEO Markus Thielen and Nansen research analyst Nicolai Søndergaard, Yonhap Infomax pointed to several factors behind the pullback. Thielen highlighted $3.5 billion in outflows from spot Bitcoin ETFs this month and roughly $800 million in stablecoins leaving the market. Søndergaard noted that long-term holders have been selling, adding that such activity has historically appeared early in Bitcoin’s four-year market cycle. Bitcoin’s most recent halving occurred on April 20, 2024, roughly 19 months ago. Market watches upcoming policy movesFrom a broader macro perspective, Reuters reported that the Bank of Japan (BOJ) could raise interest rates as early as next month amid pressure from a weakening yen. The timing remains uncertain, with the decision seen as hinging in part on the U.S. Federal Reserve, which sets policy one week before the BOJ. According to CME Group’s FedWatch Tool, markets currently assign an 84.9% chance of a 25-basis-point Fed rate cut in December. A Fed hold or a more hawkish tone could lift the dollar, further weaken the yen, and increase pressure on the BOJ to act sooner. A Fed cut, by contrast, could ease that pressure but raise questions about the U.S. outlook and the trajectory of future BOJ hikes. Monetary decisions in the coming weeks are expected to influence crypto markets, as lower interest rates generally support demand for risk assets such as Bitcoin. With both the Fed and the BOJ poised to set policy in December, market participants are watching for how shifts in liquidity and currency moves could shape the next phase of digital asset prices. 

BitMEX Returns to Derivatives Arena with Prediction MarketBitMEX, a name synonymous with the early days of crypto derivatives, has made a return to its core focus with the launch of a prediction market.Through this new product, the company aims to captivate traders by offering them the opportunity to wager on real-world events, effectively extending the boundaries of crypto derivatives trading.Photo by Amjith S on UnsplashBetting on the outcome of real-world eventsThis shift in direction is being overseen by Stephan Lutz who took the helm as CEO and group CFO in 2021.In a blog post announcing the product launch on Tuesday, the firm expressed its vision for the prediction market, asserting that it would introduce an entirely new dimension to crypto derivatives trading.The product is designed to diversify traders’ portfolios and yield returns based on predicting the outcomes of real-world occurrences, an offering that the company feels holds significant promise. Especially in bear markets characterized by subdued volatility, the prediction market could serve as a valuable instrument for traders seeking to enhance their strategies.Novel initial wagersBitMEX’s inaugural move into the prediction market sees the firm offer an array of contracts for traders to explore. Among those initial offerings are contracts enabling wagers on various outcomes, such as the percentage recovery rate of FTX’s bankruptcy claims and the likelihood of the US Securities and Exchange Commission (SEC) approving a Bitcoin exchange-traded fund (ETF) by October 17. These contracts underscore BitMEX’s intent in covering a wide spectrum of topics, with the firm promising to introduce more options in the near future.The prediction market holds the potential to revolutionize the way traders engage with real-world events, introducing a novel form of participation that transcends traditional trading boundaries. This launch has significant potential for BitMEX as it endeavors to reclaim its position in the competitive crypto derivatives market.Change of strategyUnder the stewardship of former CEO Alexander Höptner, BitMEX embarked on a diversification strategy termed “beyond derivatives,” delving into areas like spot trading and exploring new business avenues. However, the departure of Höptner in October ushered in a change in direction for the firm. The introduction of the prediction market now symbolizes BitMEX’s return to its foundational business model, with a renewed focus on derivatives.In May, the Seychelles-headquartered firm introduced perpetual contracts relative to SUI and PEPE tokens. Later that month, it launched a dedicated virtual asset service to Hong Kong-based customers. Hong Kong was its original center of operations when the company was first formed. It has since moved those operations to Singapore while maintaining its corporate presence in the Seychelles.BitMEX’s fresh foray into the derivatives space not only signifies a return to its roots but also presents traders with a means to trade relative to real-world events. By offering an eclectic range of contracts, the platform seeks to attract traders who crave more than conventional crypto trading. This strategic move could serve as a catalyst for BitMEX as it strives to regain its foothold in the competitive crypto sector.

As part of the celebration of Holi, the Hindu festival of colors, the Indian Railway Catering and Tourism Corporation (IRCTC) is unveiling a series of colorful NFT tickets for the Lucknow to Delhi train service. Governed by the Ministry of Railways, IRCTC is a central public sector enterprise in India. Taking to the X social media platform on March 13, the railway company offered a sneak peek into these NFTs, showcasing sketches of iconic landmarks from both Delhi and Lucknow against vividly shaded backgrounds.Photo by Johannes Plenio on UnsplashLimited-time ticketing offeringCommencing March 20, passengers booking tickets for Tejas trains numbered 82501 and 82502 will have the opportunity to access these exclusive NFTs, with the initiative set to conclude on April 2. In its social media post, the IRCTC outlined the additional perks accompanying these NFT tickets, stating:"These tickets are not merely digital souvenirs. ... They symbolize our dedication to enriching your journey experiences, allowing you to personalize your travel memories with your own photographs and enjoy exclusive offers from handpicked brands." As of now, the IRCTC has not officially confirmed whether these NFT tickets will be complimentary with ticket purchases or if passengers will need to make additional payments to acquire these digital collectibles. Polygon and HyperledgerNFTs, or non-fungible tokens, are digital assets built on blockchain networks. Earlier this year, the IRCTC collaborated with NFTtrace, a service offered by Bangalore-based blockchain development firm ChainCode Consulting, to offer NFT tickets for journeys to the Hindu sacred city of Ayodhya. The tickets were presented as more than mere travel documents but as cherished mementos of divine experiences. The NFTtrace website stated:"More than just a ticket to Ayodhya Dham - a souvenir of the divine Shree Ramotsav. Treasure the pious memories of Lord Shree Rama's arrival forever, with Blockchain NFT.”On that occasion, the NFT certificates were minted on the Polygon blockchain. Indian Railways has been exploring blockchain technology for some time now. Last March, the National Academy of Indian Railways partnered with Polygon to conduct a workshop aimed at raising awareness about the benefits of blockchain in railway industries. Polygon outlined that the integration of blockchain within the Indian railway system was the beginning of a new era that moves the technology towards mass adoption.In this latest instance, the NFTtrace platform is involved once again. However, this time around, the NFTs will be minted on the Hyperledger blockchain. Ava Labs, the developer of the Avalanche layer one blockchain, has expressed its interest in developing ticketing-related blockchain applications in India. Last October the firm highlighted blockchain-based ticketing as one of a number of areas it wanted to concentrate on in an expansion within India. Conventional firms in the travel industry have been experimenting with the technology on an ongoing basis in recent times. In 2023 Japan’s largest airline All Nipon Airways (ANA) launched its own NFT marketplace. Argentinian budget airline Flybondi took the decision to offer NFT-based tickets in 2023 in a partnership with NFT ticketing firm TravelX.