Galaxia Metaverse, NFT Marketplace Pala Join Forces to Expand Blockchain Ecosystem

Legislation geared towards regulating stablecoins has reached the Legislative Council stage in the Chinese autonomous territory of Hong Kong.  The bill, which extends to a 285 page document, has been formulated following “extensive consultations” with industry stakeholders, according to Eddie Yue, CEO of the Hong Kong Monetary Authority (HKMA).  This latest development moves the Chinese autonomous territory one step closer to having a comprehensive regulatory framework in place for stablecoins. The bill’s arrival at the Legislative Council follows its publication on Dec. 6 in Hong Kong’s Gazette. Subsequently, on Dec. 18, it made its preliminary entry at the Legislative Council by way of a first reading. The legislation will deem a digital asset a stablecoin if it is operated on a distributed ledger, is expressed as a unit of account and maintains an equivalent value relative to another asset that it references. Digital assets issued by governments or central banks will be excluded from that stablecoin definition.Photo by Laurentiu Morariu on UnsplashThree readings requiredBefore the bill can be enacted into law, it is required to go through a series of three readings. Allied to that process is a requirement for a series of debates, with the bill coming under the scrutiny of lawmakers. Depending upon the issues raised, this process may also require the introduction of amendments to the proposed legislation. If passed following the third reading, it will then be forwarded to the autonomous territory’s chief executive, John Lee Ka-chiu, to be signed into law. Once signed into law, stablecoin issuers in Hong Kong will then be required to obtain a license from the city's central bank, HKMA. That licensing process would implicate the HKMA scrutinizing the applicant with an emphasis on the evaluation of the issuer, its resources, the use of reserve assets and the means through which the stablecoin’s value will be rendered stable. Stablecoin optimismThis latest milestone has provoked a cause for optimism among some commentators. Sean Lee, co-founder of Hong Kong-based Web3 firm IDA, told the South China Morning Post (SCMP) that “the applications of stablecoin will be numerous.” Lee outlined that stablecoins can be used for payments, settlements, payrolls and financing, while adding that “new products will spring up, and transactions will be faster, instant, 24/7 – and at a lower cost.” Dominic Maffei, Standard Chartered’s head of digital asset and fintech for Hong Kong, is similarly encouraged. Maffei stated: “As of today, we think that stablecoins are the best available tool for connecting traditional finance and Web3 markets and have proven use cases and business models to support that belief.” Once enacted, the bill is likely to have a significant impact on the stablecoin market in Hong Kong. In Europe, the application of the Markets in Crypto Assets (MiCA) regulation is having such an impact. It has led to a growth in Euro-denominated stablecoin trading while leading U.S. dollar stablecoin Tether (USDT) is being delisted by many platforms due to its non-compliance with these regulations.

Newly Published CoinGecko Index Tracks Alleged Crypto SecuritiesKuala Lumpur-based crypto data aggregator CoinGecko has unveiled a ground-breaking index spotlighting prominent cryptocurrency tokens that the US Securities and Exchange Commission (SEC) has earmarked as potential securities.Through its “Top Alleged Securities Coins by Market Cap” page, the Malaysian aggregator categorizes a spectrum of cryptocurrency assets based on their market capitalization. At the forefront of this classification stands BNB, the native token of the Binance exchange and the BNB blockchain. It is closely followed by other prominent names such as Cardano, Solana, and Tron.Photo by Shubham Dhage on Unsplash$90 billion in valueThe alleged securities amount to a whopping $90 billion in value according to their combined market capitalization right now. Putting this in context, the overall market capitalization of the entire crypto market currently stands at $1.2 trillion, of which Bitcoin accounts for over half a trillion dollars. This estimation paints a vivid picture of the immense scale of the cryptocurrency market and the potential reverberations of regulatory interventions.CoinGecko’s index came to fruition in the first week of August, meticulously pooling the tokens that the SEC has previously classified as securities during legal proceedings. The decision to consolidate these tokens into a single index underscores the increasingly intricate interplay between the cryptocurrency market and regulatory frameworks.Lack of clarityWhen project teams and other market participants have asked for explicit clarity, SEC Chair Gary Gensler has frustratingly indicated that people need to make a simple determination based on the Howey Test — a historic securities case that has been used in the US to determine what constitutes a security. The case dates back to 1946, long before the onset of digitization let alone digital currencies.Another issue is that the SEC is simply expressing an opinion based on its interpretation of existing securities law and securities case law. Without legislation in the US, clarity can only be provided in the courts. This is a flawed approach, as market participants have to wait for actions taken by the SEC against crypto entities to be adjudicated in the US courts in order to get a better understanding of the legal standing of these assets.This comprehensive analysis provided by CoinGecko’s new index presents invaluable insights into the dynamic terrain of cryptocurrency regulation. It underscores the intricate dynamics between the digital currency market and the regulatory bodies that seek to govern it.Taking the regulation of derivatives as a case in point, their emergence led to a very messy process of arriving at regulatory clarity. The very same thing is playing out with digital assets. While it is imperfect, there is no doubt that clarity will eventually be reached.In the meantime, as the US fumbles where digital assets are concerned, regional authorities in East Asia and the Middle East are capitalizing on US regulatory shortcomings, implying that we will likely see further growth in crypto and Web3 in these locations until the US recovers.

Xxsoft, an information technology firm based in South Korea, announced today that it entered a partnership with a blockchain firm Infinite Block, local media outlet Kyunghyang Games reported. Xxsoft is the operator of CryptoTax, a tax and accounting service specializing in crypto assets. The two companies aim to provide crypto custodial and accounting services for companies and enterprises.Photo by Sarah Elizabeth on UnsplashCryptoTax specializes in handling crypto investors’ taxation using algorithms designed to process crypto tax and accounting. These algorithms were developed with participation from tax accountants and accountants with expertise in crypto assets. CryptoTax also offers a solution as a service (SaaS) called Cryptotax Enterprise, which offers corporate clients the advantage of automated tax processing with direct access to accounting documents.  Meanwhile, Infinite Block is a key management service (KMS) provider based in Korea, serving clients ranging from startups to big firms. The company provides crypto wallets catering to individual clients’ needs, from internet-enabled hot wallets to cold wallets that keep private keys offline. Infinite Block employs multi-signature technology and multi-party computation to securely protect clients’ private keys. Rising demand for institutional crypto accountingYoon Dong-hwan, CEO of Xxsoft, said the shift in crypto regulations – as seen in events like the approval of spot Bitcoin ETFs by the U.S. Securities Exchange Commission – will result in higher demand for crypto custodial services compliant with financial authorities. He stated that the partnership with Infinite Block will allow the company to provide a convenient service tailored to the needs of corporate clients.  Jeong Gu-tae, CEO of Infinite Block, highlighted the importance of companies being equipped with a fully compliant internal control system when it comes to crypto taxation and accounting, because firms are subject to stricter regulations compared to individual investors. Jeong reaffirmed the company’s commitment to building a healthy local crypto market, saying that it will continue developing effective crypto asset management systems for corporations in close cooperation with CryptoTax.