Lackluster debut for crypto ETFs in Hong Kong

Taiwan Advances Crypto Regulation with Initial Reading of Digital Asset BillTaiwan has furthered its efforts on the path of digital asset regulation, as the nation’s legislature introduced a cryptocurrency bill for its inaugural reading.The “Virtual Asset Management Ordinance Draft” bill represents a significant stride toward establishing a legal framework for digital assets in the country. The proposal passed its first reading at the Taiwanese state legislature, according to published parliamentary records.Photo by Ethan Lin on UnsplashBill objectivesThe primary objectives of the bill are to define virtual assets, establish operational standards for asset operators, enhance customer protection, and make it mandatory for industry players to join relevant associations and secure regulatory permissions.Up until now, Taiwan has maintained a relatively hands-off approach to the cryptocurrency sector. Its oversight was limited to existing know-your-customer (KYC) and anti-money laundering (AML) laws. However, this stance evolved following the collapse of the cryptocurrency exchange FTX in November. The platform’s popularity among Taiwanese users, owing to favorable US dollar interest rates compared to local banks, led to increased regulatory scrutiny.A member of Taiwan’s parliament, Yung-Chang Chiang, told The Block that “after the first reading of the bill, discussions on the regulatory framework for the virtual asset industry have progressed to the next stage.” Chiang added:“We hope that the Financial Supervisory Commission can also submit their version of a draft bill to the legislature, allowing various sectors of society to further consolidate consensus during the process.”In contrast to cryptocurrency regulations in neighboring Hong Kong, Taiwan’s bill does not adopt a strong stance on derivatives or stablecoins. Nevertheless, it recognizes that derivatives linked to virtual assets possess unique characteristics, with a specific mention of perpetual contracts. This recognition opens the door for the possibility of cryptocurrency derivative-specific regulation in future drafts.Importantly, the bill does not restrict the trading of virtual assets to professional investors, which allows broader participation in the digital asset market.Auditing and segregation of fundsUnlike Japan, which mandates the use of custodians for locally licensed exchanges, the draft bill in Taiwan only necessitates the segregation of customer assets from business funds. It does not explicitly require the involvement of third-party custodians.Under this legislation, exchange operators will be obliged to commission periodic reports from accountants regarding their operations and asset management. Additionally, regulators, such as the Financial Supervisory Commission (FSC), will have the authority to conduct regular inspections of exchange internal control and audit systems.Although this initial draft does not explicitly mention “Proof of Reserves,” it does indicate that the regulator will establish standards for asset ratios after consulting with industry stakeholders, with the expectation that licensed exchanges will adhere to these standards.Fostering self regulationTaiwan’s crypto industry stakeholders have expressed their support for formal regulatory oversight. Wayne Huang, co-founder and CEO of Taipei-based fintech company XREX, recently affirmed the industry’s willingness to collaborate with the FSC in defining regulatory operations.In tandem with the establishment of a regulatory framework, regulators have indicated that they want industry stakeholders to move towards some level of self-regulation. That led nine exchange businesses to form an industry association last month.The bill’s second reading is pending, and the FSC is anticipated to provide its input and recommendations before the next phase of the legislative process.

Indonesian Food Industry Conglomerate Embraces Blockchain TechIndonesia’s ID Food, a prominent state-owned food industry holding company, is embracing blockchain technology to revolutionize its fisheries operations.Photo by R Eris Prayatama on UnsplashD3 Labs CollaborationIn a strategic collaboration with Singapore-headquartered D3 Labs, a blockchain-based fintech startup, ID Food is set to usher in a new digitized fish trading process. The move leverages the power of blockchain to enhance traceability and transparency throughout the value chain while adhering to stringent fishing standards.With the backing and support of PT Perikanan Indonesia, a subsidiary specializing in the fisheries sector, ID Food will harness D3 Labs’ innovative blockchain-based solution to create a real-time fish exchange platform known as the Indonesia Fishery eXchange (IFX).Indonesia Fishery eXchange (IFX)IFX promises an array of advantages, including transparent stock monitoring and auctions, the facilitation of digital payments for seamless transactions, robust Know Your Customer (KYC) measures, and stringent account management protocols to safeguard against fictitious buyers.Furthermore, it will integrate seamlessly with digital sales markets abroad. The recent collaboration was signed by ID Food and D3 Labs in the presence of fisheries industry stakeholders from 29 countries earlier this month.Dirgayuza Setiawan, the Director of Development and Business Control at ID Food, expressed enthusiasm for the collaboration, noting the positive implications it holds for fishermen, producers, and consumers. He stated:“We recognize the importance of sustainability in the fisheries industry, especially in Indonesia, which is one of the world’s largest fish producers. In addition to improving efficiency and transparency, the use of blockchain technology can enhance productivity, the well-being of our fishing partners, and sustainability in the fisheries sector.”He added that the collaboration with D3 Labs is a commitment to drive innovation in the fisheries industry, with the goal of improving efficiency, productivity, well-being, and sustainability in this sector.Trian Yunanda, Indonesia’s Secretary of the Directorate General of Wild-Catch Fisheries at the Ministry of Maritime Affairs and Fisheries, praised the partnership as a pivotal step towards building a robust fisheries ecosystem for the future. With blockchain technology at its core, this collaboration is aiming to revolutionize Indonesia’s fisheries industry, fortifying its position as a global leader in responsible and efficient fish trade.ID Food, the corporate brand of the state-owned food giant PT Rajawali Nusantara Indonesia (Persero), boasts a diversified portfolio spanning agriculture, livestock, fisheries, and trade and logistics.Indonesia’s digital rupiahThis is not D3 Labs’ first Indonesian blockchain-related collaboration. In August, the Singaporean blockchain technology firm partnered with the Indonesian Blockchain Association with the objective of supporting the first phase of development of Indonesia’s digital rupiah.The initiative, titled Project Garuda, is being overseen by Bank Indonesia, the Southeast Asian country’s central bank. While cryptocurrency is not deemed to be legal tender in Indonesia and is not permitted for use when it comes to payments for goods and services, the Indonesian authorities permit trading of digital assets. In June, the Indonesian government published a document that set out a list of cryptocurrencies which are eligible for trading within the country.

Incheon Unveils Ambitious Four-Year Plan to Become a Leading Blockchain HubIncheon Metropolitan City, home to the largest international airport in South Korea, revealed on October 16 that it has successfully formulated a four-year comprehensive plan that aims to position Incheon as a blockchain hub and spearhead the digital economy sector. This ambitious strategy is slated from 2024 to 2027. The formulation of this plan was entrusted by Incheon to a third-party entity back in April.Shaping Incheon as a blockchain hub has been one of Mayor Yoo Jeong-bok’s policy objectives. Under his leadership, Incheon is dedicated to fostering an industrial ecosystem that supports the digital economy, with a special emphasis on blockchain technology — an essential component in the Web3 era.Photo by Shubham Dhage on UnsplashStrategic roadmapIncheon has crafted an action plan for the upcoming four years, with the primary aim of transforming itself into a city that promotes public involvement, fosters sustainable development, encourages cutting-edge innovation, provides a favorable environment for businesses, and advances technology.Mainnet launchAs the first step, Incheon will establish a blockchain mainnet in 2024. This infrastructure will serve as the foundation for the development of associated services and will offer citizens firsthand experiences of convenience.Through the construction of blockchain infrastructure, encompassing mainnets and testnets, Incheon strives to simplify the process for companies in need of blockchain technology. Even those without their own technological resources or substantial capital will find it more accessible to develop services utilizing blockchain within the city.Blockchain-based public servicesThe city has also discovered various blockchain-based public services for Incheon residents. One of them is constructing digital wallets that leverage resident identification cards through decentralized identifiers (DIDs). These digital wallets are designed to offer a streamlined, one-stop solution, allowing citizens to conveniently access a wide array of public services. For instance, Incheon residents will have the capability to gain entry to public facilities, access various discounts, make online reservations, and accumulate loyalty points, all through the straightforward authentication provided by these digital wallets.Furthermore, the city is looking to implement blockchain technology in the following public services. The “eco platform” will serve as an integrated system aimed at incentivizing citizens who actively engage in environment-friendly activities. The “volunteer platform” will simplify volunteer work processes, including certification and recognition. The “safety management platform” will ensure transparent and safe operations on construction sites.Incheon also plans to create a cluster for the blockchain industry in the Incheon Free Economic Zone (IFEZ). The plan is to attract a blockchain technology innovation support center in the Songdo area of Incheon to create synergies with local businesses.Support for blockchain startupsThe city seeks to create a support system for blockchain startups, assisting them from their inception to growth and global expansion. Additionally, efforts will be made to build a global cooperation network and attract foreign investment funds to further bolster the blockchain ecosystem.The four-year plan also delves into more specific objectives. Among them are the establishment of a system to nurture blockchain talent, creating a conducive environment for refining governance and policies, and initiating a branding campaign to bolster Incheon’s competitive edge in the global arena.Son Hye-young, who leads the Data Industry Division in Incheon City, emphasized that the four-year plan represents Incheon’s ambitious vision to establish itself as a blockchain technology hub. She also expressed the city’s commitment to actively support the growth of businesses in this sector and to create tangible and beneficial services.The detailed implementation strategy for the master plan will be disclosed at the Global Blockchain Incheon Conference (GBIC) 2023, a two-day event set to commence on October 30 at the Songdo Convensia.