Blog Cryptocurrency News

The Philippines Introduces New Crypto Regulation and South Korea’s Central Bank is not in Favor of State-issued Digital Asset


The Philippines has drafted a comprehensive legal framework to regulate digital tokens in a move set to protect crypto investors. South Korea’s central bank published a report throwing water on the possibility of a state-issued digital currency because doing so would destabilize the country’s economy and monetary policy. Coincheck, a Japanese exchange known for the infamous hack in January last year says that it has learned from the mistakes of the past.

Japanese financial watchdog reports a decrease in cryptocurrency-related queries

The Japanese financial watchdog published Q4 data on cryptocurrency-related queries received by the agency. The Financial Services Agency, which has the mandate of overseeing the crypto market in the country says the number of crypto queries declined considerably in the last quarter.

The agency received 788 inquiries involving virtual currencies in the last quarter of last year, down from 1,231 inquiries from the previous quarter.

235 cases received by the agency involved general inquiries questions while 228 cases were involved with individual transactions.

The Japanese financial regulator has previously stated that it wants to promote the growth of the industry but under a strict set of rules.

Bank of Korea report: issuing a digital currency could destabilize the financial system

The Bank of Korea (BoK), the country’s central bank released a report stating that issuing a central bank digital currency (CBDC) can potentially have negative ramifications for the economy and financial stability.

The researchers of the report argue that issuing a theoretical digital currency could leave commercial banks with a cash shortfall. As a result of this, commercial banks could be forced to raise interest rates on loans.

“This has negative effects on financial stability, which increases the likelihood of bank panic in which commercial banks are short of cash reserves to pay out to depositors,” reads part of the report.

Kwon Oh-Ik, a co-author of the report said that supplementary measures would need to be implemented in order to counteract the effects of the issued digital currency.

In June last year, the BoK said that issuing a CBDC could affect the country’s monetary policy and negatively affect the economy.

The BoK’s report comes a few months after the chief of the International Monetary Fund (IMF), Christine Lagarde, urged central banks to experiment with CBDCs.

The Philippines introduces new crypto rules aimed at investor protection

The Philippines, through the Cagayan Economic Zone Authority (CEZA), introduced a new comprehensive set of rules that cover the acquisition of cryptocurrencies in a bid to protect investors.

The announcement was made on Feb. 4 by the self-regulatory organization The Asia Blockchain and Crypto Association (ABACA).

CEZA approved the Digital Asset Token Offering (DATO) regulations that deal with the acquisition of crypto assets. The DATO will be regulated by the CEZA and enforced by the ABACA.

“It is our goal to provide a clear set of rules and guidelines that will foster innovation yet ensure proper compliance by actors in the ecosystem. It is our hope that these set of regulatory innovations will take the digital asset sector one step closer to adoption and acceptance by institutions and the traditional financial system,” said CEZA administrator and CEO Sec. Raul Lambino.

The new rule entails the following:

  • All DATOs are required to have full and proper documentation detailing the issuer, project, certification of experts, etc.
  • Digital tokens have to be listed on the regulated and approved Offshore Virtual Currency Exchange (OVEC).

The new regulation is split into three distinct tiers, each identified by the investment made in digital tokens.

Bithumb Global launches OTC desk under the Ortus brand name

Hong Kong-based Bithumb Global announced the launch of a new Over-the-counter (OTC) trading desk for its deep-pocketed clients under the Ortus brand.

The new “block deal matchmaking service” allows institutional investors to trade digital assets without going through the books.

Per the announcement, there is a strict onboarding process in place in which applicants are required to provide sufficient KYC and AML documentation.

“Institutions trading digital assets need to open accounts at exchanges and OTC desks around the world; however, there is no real solution for an aggregated liquidity provider or a trusted interdealer where Institutions can trade these assets,” said director Rahul Khanna.

To fill this market gap, Ortus will operate to allow institutions to buy and sell digital assets through a network of global liquidity providers and benefit from a competitive and best price execution service,” added Khanna.

Japanese exchange restructures management after hacking scandals

Japan is one of the few countries that can manage to recover from major crypto exchange hacks and still allow the industry to flourish.

At the same time, the affected exchanges have a huge role to play in cleaning up the mess and reassuring the public that they are ready to move forward and leave behind the setbacks of the past.

Coincheck, a Japanese exchange fell victim to one of the hacks in the young industry after hackers made off with $530 million in NEM currency in January 2018. The exchange was sold to Monex Group a few months later and the founder of the exchange, Koichiro Wada was replaced as the exchange’s CEO by Toshihiko Katsuya.

Katsuya, an experienced executive in the financial sector assured stakeholders at a news conference that they have learned from the unfortunate hack.

“Monex has been in the securities business for 20 years. By building in our knowledge, we have been able to raise [Coincheck] to a considerably high level,” said Katsuya.

bitFlyer Holdings, an operator of one Japan’s leading cryptocurrency exchanges replaced its founder Yuzo Kano as CEO with Yoshio Hirako, another experienced executive in the financial sector.

There is one obvious pattern: crypto firms are re-affirming the need for proper management by putting experienced financial executives in key positions.

Survey: Chinese economists divided over cryptocurrencies and blockchain technology

The crypto market is still very young, growing, and promises to change the financial status quo. Like any other revolution, it has left many people divided over its future and relevance.

Chinese economists are no exception and they are divided about cryptocurrencies.

In a survey done by Tencent through the Financial Science and Technology Think Tank, 100 chief economists from universities, banks, and research institutions failed to agree on central points around the crypto space.

33 percent of the respondents said that blockchain technology is important, 32 percent took the neutral route and 19 percent were not amused by the nascent technology.

51 percent were in favor of a government-issued digital currency while 40 percent were against it.

China is a communist state is known for its heavy-handedness against the emerging cryptocurrency ecosystem.

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