Blockchain Research
Why is Cambodia cracking down on crypto?
We observed with great interest as Cambodia launched a crackdown on cryptocurrency beginning on December 3. The Telecommunication Regulator of Cambodia (TRC) moved to block access to 16 cryptocurrency exchanges, among them Binance, Coinbase, and OKX. The TRC said that it implemented the restrictions because the platforms are not properly licensed by the Securities and Exchange Regulator of Cambodia (SERC).
Partior closes its Series B round having raised US$80 million
With the decision by Deutsche Bank (DB) to invest in Partior, the ambitious blockchain firm has raised a total of US$80 million in its Series B funding round. The German bank joined Partior's Series B funding round as a strategic investor. Its move should be complimentary to the recent launch of dbX, DB’s next-generation correspondent banking ecosystem for financial institutional clients.
Why China and India are still wary of stablecoins
In a growing number of countries, stablecoins appear here to stay. DeFiLlama data show that the total market capitalization for stablecoins has risen 46% this year to a new high of roughly US$190 billion, cementing a remarkable comeback from the nadir the cryptocurrencies experienced following the implosion of TerraUSD in 2022. Yet two of the world’s largest economies and its two largest by population remain wary of stablecoins. How China and India ultimately choose to approach stablecoins could have significant implications for their broader adoption.
Why does North Korea steal so much crypto?
North Korea has become the most tenacious state actor when it comes to theft of digital assets. Given its proximity to the Hermit Kingdom, a shared language and a deep understanding of how its criminal pursuits are carried out, South Korea plays a leading role in the investigation of Pyongyang’s crypto crime. In late November, South Korean police said that their investigation confirmed that hackers linked to North Korea's military intelligence agency were responsible for a large 2019 Ethereum heist.
Project mBridge faces an uncertain future
We recently wrote about the implications of the Bank of International Settlements (BIS) possibly exiting the mBridge cross-border CBDC project it has overseen, but we did not expect the Switzerland-based entity would make its decision so soon. On October 31, BIS announced its departure from mBridge, and on Nov. 11 published an update on its official website stating that the initiative had reached the minimum viable product (MVP) stage. There was no explanation given for why BIS exited mBridge and no details provided about next steps for the project.
Why India is slow-walking the digital rupee
What happened to the digital rupee? With each passing week, it seems that India’s CBDC project is fading further into the background of the subcontinent’s financial ecosystem. In contrast to China, which is unswervingly pressing forward with the digital renminbi – irrespective of actual market demand, it should be noted – India’s financial regulators seem uncertain if they really want a digital fiat currency.
Why China will hold firm on its crypto restrictions
Given that U.S. President-elect Donald Trump has recently taken a pro-cryptocurrency stance, it was only a matter of time before someone prominent in the digital assets community found a way to spin it as positively affecting the China crypto market. Never mind that Trump is known for his mercurial nature and has only spoken about crypto in the most general terms. In this case, it is HashKey Group chairman and CEO Xiao Feng who is espousing such a viewpoint.
Why is BIS having second thoughts about mBridge?
Ever since the China-led central bank digital currency project mBridge was launched several years ago, there have been whispers that its ultimate goal was to develop an alternative payments rail that could circumvent the U.S.-dominated international financial system. That is because mBridge aims to establish direct links between the central banks of its participants, allowing money to be sent outside of the existing correspondent banking system. It was primarily the involvement of the Bank of International Settlements (BIS) in mBridge that gave the project an appearance of neutrality. Yet with the news that BIS is considering shutting down the project, it seems clear the CBDC cross-border payments initiative cannot be separated from geopolitical tensions.
South Korea sees growth in crypto investors
South Korea has long had an enthusiastic cryptocurrency investing community. Over the past 18 months, that community has grown briskly. Data compiled by South Korean regulators show that the number of crypto investors in the country increased 21% year-on-year in the first half of 2024 to 7.78 million, which is about 15% of the South Korea population of 52 million. During the same period, the average daily trading volume of cryptocurrencies jumped 67% to 6 trillion won while the market value of cryptocurrencies in South Korea rose 27% to 55.3 trillion won.
Hong Kong doubles down on crypto bet
Hong Kong’s financial regulators and at least some in the industry seem to believe that the city’s future as a financial hub depends on its embrace of cryptocurrency. For the past two years, Hong Kong has been relentlessly pitching itself as a digital assets hub in an effort to regain ground lost to Singapore and mainland China. The city-state has emerged as a larger and more important fintech hub, while mainland Chinese stock exchanges are attracting companies to list that might have once chosen to go public in Hong Kong. While it can be argued that Hong Kong would be better served by focusing less on an industry that remains problematic in many respects, its big bet on crypto might end up paying off big.
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Crypto retains its popularity in India
The Indian government has long eyed cryptocurrencies warily, viewing them largely as contributing to money-laundering risk and challenging the central bank’s monetary authority. Though India has stopped short of outright banning digital assets – or a de facto ban like what China has – it has nonetheless made investing in them smoothly a challenging process – especially the 30% tax on gains from cryptocurrency. Nevertheless, crypto remains popular among with Indians, with a recent Chainalysis study showing that India leads the world in crypto adoption.
Crypto sees mixed signals in Singapore
Singapore is continuing to take a measured approach to digital assets as seen by the growing prevalence of stablecoin payments in the city-state. In the second quarter, stablecoin payments reached a new high of US$1 billion in Singapore, according to data from blockchain research firm Chainalysis. With the announcement of stablecoin regulations in August 2023, Singapore bet that these “safer” cryptocurrencies have staying power and will play an increasingly important role in the future of financial services.
Hong Kong is learning that becoming a crypto hub is tough
It was inevitable that Hong Kong’s much-hyped cryptocurrency initiative would run into some serious challenges. We are not surprised to learn that the city’s regulators are not satisfied with the compliance level at some “deemed to be licensed” exchanges operating in the city. While demand for digital assets remains strong in many markets, and Hong Kong has a strong foundation as a financial services hub on which it can build, the crypto sector itself remains immature and prone to malfeasance while there is no global consensus on how to manage digital asset flows.
Why the digital rupee is losing momentum
2024 might be remembered as a turning point for central bank digital currencies (CBDCs) – the year when interest in them began to significantly wane. In the case of India, while the government seems determined to push forward with the digital rupee, retail users are more circumspect. The Reserve Bank of India (RBI) highlights its estimation of 5 million digital rupee users. If we stop to consider that India has more than 1.4 billion people, then less than ½ of 1% of the population is not a particularly strong adoption rate – especially for something that has such strong government backing.