Namaste, Sawadee Ka | #26
[BlockchainAsia #26]
The landscape for blockchain & crypto in Asian countries is like an organism which is constantly changing and evolving, sometimes for the better, sometimes for the worse; to our comfort, there is no lack of positive developments.
India is notorious for its regulatory changeability when it comes to crypto policy. Its new law to impose a high tax rate on crypto is believed to stymie innovation. The market, however, is too big to ignore.
Singapore continues to disappoint the industry due to its tightening regulations toward crypto operators.
Japan’s crypto exchange shareholders are looking for liquidation opportunities either through M&A or overseas public listing.
Coveting the lucrative crypto business, South Korea’s largest commercial banks are going to pressure the government for permits.
Thailand is definitely doing something right to cultivate opportunities for Web 3.
Binance may finally find its foothold in the Middle East.
I am Coco Kee. Please read on.
India
Despite the fact that India’s parliament is unlikely to pass the long-awaited crypto bill in the near future to provide more regulatory clarity for the industry, and that India’s 30% crypto tax policy became law on April 1, global companies jump into the market headfirst. India and Southeast Asia have been the fastest adopters of crypto worldwide.
Coinbase is going to hire over 1,000 people by the end of this year. Current employees in India are around 300, according to Coinbase’s blog. Coinbase’s venture arm also plans to increase its investment in this region.
However, 4 days after it offered crypto trading services to customers in India using UPI, a payment system developed by a coalition of Indian retail banks, Coinbase had to suspend the service because UPI became unavailable. The exchange has to identify alternative payment methods to resume offering its services. Most Indian banks support the Central Bank’s stance to ban crypto, though the Supreme Court overturned the Central Bank’s decision two years ago.
Taki, an “engage to earn” social media raised $3.5 mm, is a portfolio company incubated in the Web 3 venture studio SuperLayer. Coinbase Ventures is one of this round’s investors. Taki, co-founded by Sakina Arsiwala and Kevin Chou, (Kevin also serves as the Managing Partner of SuperLayer), will focus on India, South Asia and the Middle East.
Singapore
DBS Digital Exchange is getting cold feet about retail customers, quoting that most regulators in Singapore are rightfully concerned about the retail market and that it does not foresee any immediate change in the regulatory environment. This decision has reversed the bank’s stance stated in February.
On April 5, Singapore passed “Financial Services and Markets Bill 2022”. According to the bill, “to fully align with the enhanced FATF standards and mitigate the reputational and ML/TF risks, the FSM Bill will regulate all VASPs created in Singapore that provide virtual asset services outside of Singapore. Such VASPs which provide digital token (“DT”)12 services outside of Singapore, will be regulated as a new class of FIs, with licensing and ongoing requirements to ensure that MAS has adequate supervisory oversight over them.”
Coinbase asks its customers in Singapore, Japan and Canada to provide recipient information for their transfers of crypto.
Japan
Gumi Cryptos Capital, a U.S. and Japan-based VC fund raised $110 mm Fund II. The fund will invest in early-stage blockchain startups such as DeFi, GameFi and Web 3.
Japanese PE Fund ACA Group will acquire a majority stake in one of the largest crypto exchanges bitFlyer for $370M. The high compliance expenses due to tight regulations in Japan have forced some exchanges to seek capital either through selling to new shareholders or going public overseas. Japan does not allow crypto exchanges to list in the country. Japanese exchange Coincheck plans a $1.25 bn listing on Nasdaq via a SPAC.
A subsidiary of Kakao, one of South Korea’s internet giants, has acquired a majority stake in a Japanese crypto exchange Sakura Exchange Bitcoin to integrate its web-based cartoon content with crypto and blockchain.
South Korea
The Korea Federation of Banks (KFB), an industry agency representing commercial banks in South Korea has expressed intention to the government to pursue the license required to do crypto business. Right now, crypto exchanges control 90% of the market share. The commercial banks KFB represented are the top five commercial banks KB Kookmin, Shinhan, Hana, Woori and NongHyup, as well as online-only KakaoBank and K bank.
Terra, South Korea’s public blockchain, has bought $1.4B bitcoin to fund the reserve of its stablecoin UST, which has a market value of $16B. The purchase of bitcoin is through Terra’s Singapore-based Luna Foundation Guard.
Thailand
Seax Ventures, a VC fund focused on the South East, had an oversubscribed raise of $60M for its 2nd fund to invest in pre-seed to A rounds. The fund invests in startups in sectors including blockchain & Web 3, foodtech, biotech & life science, AI, robotics, and IoT & hardware.
Thailand-based Alpha Finance Lab evolves into a Web 3 incubator/decentralized VC fund Alpha Venture DAO focusing on DeFi, NFTs and metaverse. According to the report, the companies backed by Alpha include Homora, the first cross-chain leveraged yield farming protocol. Run as a decentralized VC fund, Alpha taps into its community members for their expertise as well as for funding. In the future, it will use the Alpha token to support DAO governance.
SCB 100X, the investment arm of Thailand’s biggest bank Siam Commercial Bank, is going to set up a virtual headquarters in the Sandbox, where it is going to host webinars and workshops. It is an indication of the bank’s interest in exploring metaverse and its applications.
Middle East
Binance received in-principle approval from the Abu Dhabi Global Market (ADGM) to operate as a broker-dealer in virtual assets. ADGM is an international financial center located in the capital of UAE. With this approval, Binance will be able to offer services to the Middle East and North Africa (the MENA region). In July 2020, Binance announced its plan to expand to MENA.
In March 2022, Binance was given a crypto-asset service provider license by Bahrain's central bank; almost simultaneously, it received a virtual asset license from Dubai.
UAE is on the gray list of money-laundering watchdogs.
Enjoy the spring,
Coco
In the innovative blockchain/crypto & digital asset ecosystem, Asia is the other side of the coin. Blockchain Asia helps you stay on top of what is going on in the Far East.
Blockchain Asia covers exclusively blockchain and crypto & digital asset developments in Asia, including regulation, investments, new deals and company highlights. Content is selective and curated.
I am the co-founder of Kee Global Advisors. Please email insight@keeglobaladvisors.com with any ideas or thoughts. Would love to hear from you!