Chinese president criticizes CBDCs
On July 4, Xinhua News Agency, China’s state broadcaster, published a transcript of President Xi Jinping’s speech at the 2023 Shanghai Cooperation Organization (SCO) Summit. The SCO is one of the The world’s largest regional organizations for political, economic and security cooperation, and was established by China and Russia in 2001.
During the speech, President Xi welcomed Iran as a full member of the organization and praised Belarus’s decision to join. He also spoke about the importance of central bank digital currencies (CBDCs):
“The Chinese side proposes to expand the participation of SCO countries’ local currency agreements, expand sovereign digital currency cooperation, and promote the establishment of SCO development banks.”
In January, the People’s Bank of China reported that there were 13.61 billion yuan digital CBDCs in circulation, representing around 0.13% of the money supply. Since then, the use of the CBDC has expanded to the country’s Belt and Road initiative, various consumer airdrops, and as a means of payment for daily transportation. However, experts have warned that despite constant promotion, the coin has struggled to gain traction.
On July 10, local news outlet East Money reported that a digital yuan CBDC-linked SIM card will soon be available to Chinese consumers. Because the digital yuan CBDC digital wallet is embedded in the SIM card, people can pay their phone bills through a POS machine, even if their phone has no power.
Chinese President Xi Jinping during the Shanghai Cooperation Summit (CCTV)
Cryptocurrency license costs in Hong Kong rise to HK$100 million
According to a July 5 report by Tencent News, the combined labor, material, and technical cost associated with obtaining a Hong Kong crypto exchange license has risen to HK$100 million ($12.77 million). since its creation on June 1.
However, even if the infrastructure is in place, the experts noted that the license application could still be denied or the business opportunity disappear once the license is approved. Tencent News wrote:
“The equipment that left Hong Kong was installed in Malaysia last month. They can rent a large floor workspace for a monthly rent of RMB 60,000 (USD 8,296) in the local city center, and there are very cheap IT technicians in the local area. These émigré teams believe that compared to Hong Kong, it is even more advantageous to do crypto projects in Southeast Asia.”
All crypto exchanges in Hong Kong must obtain a regulatory license or cease operations in the administrative region by the middle of next year. Since the announcement, exchanges such as Huobi, OKX, BitgetX, Hashkey Pro, and Gate.io have applied for licenses in Hong Kong.
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Chinese cross-chain protocol hacked once again
On July 7, the developers of the Chinese cross-chain bridging protocol Multichain shared a worrying message stating, “The Multichain service is currently stopped and all bridging transactions will be stuck on the origin chains. There is no confirmed restart time. Please do not use the Multichain bridging service now.” On the same day, blockchain security firm PeckShield warned that over $126 million in funds had been drained from the Multichain.
Circle quickly froze $63 million in coins (USDC) in funds suspected of being stolen, while Tether froze $2.5 million in USDT. Changpeng Zhao, chief executive of cryptocurrency exchange Binance, said the attack did not affect his users as the company had withdrawn all funds some time ago.
It seems that the malicious actors broken the protocol’s private keys and subsequently moved the protocol’s assets elsewhere, though it took until July 10 for the funds to make another move, with a wallet address identified as “Fake_Phishing183873” receiving 10.2 million USDT and 67.76 wrapped Bitcoin (wBTC) from the Multichain address. Immediately after the hack, the price of Multichain tokens fell 20% from its highs and is now trading at $2.62 each.
Multichain was previously hacked for $7.9 million in July 2021 due to another private key vulnerability. Interestingly, Zhao Jun, CEO of Multichain, has been missing for almost two months, and rumors claim that Chinese police arrested him in May. Around the same time, users reported on-chain transactions having abnormally long transaction times following a recent backend node upgrade. The protocol currently has a total value locked up of $1.26 billion.
Multichain was one of the largest cross-chain protocols before the start of the 2022 cryptocurrency bear market. (DeFi Calls)
Singapore Tightens Control Over Crypto Activities
The Monetary Authority of Singapore (MAS) will require digital payment token (DPT) providers to place customer assets in a statutory trust before the end of the year. In addition, DPTs will be prohibited from issuing crypto loans and staking services for retail investors. MAS wrote:
“These measures are introduced following an October 2022 public consultation on regulatory measures to enhance investor protection and market integrity in DPT services. The consultation received significant interest from a wide range of respondents, with broad support.”
Cryptocurrency lending and staking services will continue to be permitted for institutional and accredited investors. Despite the new regulations, the MAS warned that “while segregation and custody requirements will minimize the risk of loss of clients’ assets, consumers may still face significant delays in recovering their assets in the event of the insolvency of service providers”. The regulator is seeking public comment on the proposed rule changes through August 3.
Thai Crypto Exchange Raises $17.1 Million
According to a recent filing, Thai cryptocurrency exchange Bitkub has sold 9.22% of its capital, amounting to 600 million baht ($17.1 million), to Thai conglomerate Asphere Innovations PLC. During the transaction, Bitkub was revealed to have 31.9 billion baht ($910 million) in assets and customer deposits, as well as 31.4 billion baht ($890 million) in liabilities. The company posted a total gross profit of 314.87 million baht ($8.97 million) in the first quarter of 2023.
Bitkub is the largest cryptocurrency exchange in Thailand, with nearly 90% market share in 2021. Thailand-based Siam Commercial Bank had previously signed an agreement to acquire 51% of the company that year for $17.85 billion. baht ($510 million). However, the bank canceled the deal in August 2022. Bitkub’s total assets decreased by 64% from December 31, 2021 to December 31, 2022.
Japanese Gaming Conglomerate Moves Toward Blockchain Gaming
On July 10, South Korean non-fungible token firm Line Next revealed that it had signed an MoU with Japanese video game giant Sega to remake one of Sega’s classic games on its Web3 gaming platform, Game Dosi.
Released in May, Game Dosi currently has six titles, including its in-house game, Project GD. Through the platform, players can buy and sell NFT heroes and challenge other players.
Founded in 1960, Sega is one of the largest video game conglomerates in Japan, with nearly $2 billion in annual video game sales. Its most iconic franchise is Sonic the Hedgehog, whose titular hero also serves as the company’s mascot.
An image from Game Dosi NFT (Twitter)
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Zhiyuan Sun is a journalist at Cointelegraph, focusing on technology-related news. She has several years of experience writing for major financial outlets such as The Motley Fool, Nasdaq.com, and Seeking Alpha.
This post Asia Express – Cointelegraph Magazine
was published first on https://cointelegraph.com/magazine/china-expands-cbdcs-tentacles-malaysia-is-hks-new-crypto-rival-asia-express/