What The FinTech #117 - 30 Oct 2022
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What The FinTech Video & Podcast - Season 5 Episode 5
Last Wednesday, I was joined by Henson Tsai from SleekFlow, for an enthralling interview about their omni-channel social commerce platform, and how SleekFlow empowers the future of social and commerce.
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What The FinTech - Season 5 Episode 6
On Wednesday, I'll be in an interesting interview with Peter Wong from Prenetics Please join us and let me know if you have any questions.
What was the FinTech this week in: 📰
HONG KONG
Hong Kong Fintech Startup Reap Raises $40 Million For Web3 Payments
Hong Kong Plans to Legalize Retail Crypto Trading to Become Hub
For private bankers in Hong Kong, digital yes, crypto no
WATI raises $23M in series B, powering WhatsApp for businesses in India
Most Family Offices and HNWIs Investing in Digital Assets
Hong Kong Fintech Startup Reap Raises $40 Million For Web3 Payments
Reap, a digital payment company based in Hong Kong, has netted $40 million in a funding round aimed at developing infrastructure to help facilitate payments between Web3 projects and traditional businesses. The financing is led by Silicon Valley-based Acorn Pacific Ventures, U.S. financial services firm Arcadia Funds and Hong Kong digital asset manager HashKey Capital, Reap said in a statement on Thursday. Other investors who participated in the round include Hong Kong fintech firm Payment Asia, as well as U.S. venture capital firms Hustle Fund and Fresco Capital, among others. Reap said the proceeds will be used to set up regional hubs throughout Asia, North American and Europe, and double its team by the end of next year. Meanwhile, the company will continue to build Web3 infrastructure in collaboration with cryptocurrency firms to help provide them access to traditional merchants and physical services. The infrastructure is expected to launch as early as January.
Hong Kong Plans to Legalize Retail Crypto Trading to Become Hub
Hong Kong is pivoting toward a friendlier regulatory regime for cryptocurrencies with a plan to legalize retail trading, contrasting with the city’s skeptical stance of recent years and the ban in place in mainland China. A planned mandatory licensing program for crypto platforms set to be enforced in March next year will allow retail trading, according to people familiar with the matter, who asked not to be named because the information isn’t public. Regulators are seeking to allow listings of bigger tokens but won’t endorse specific coins like Bitcoin or Ether, the people said, adding the details and timetable have yet to be finalized as a public consultation is due first.
For private bankers in Hong Kong, digital yes, crypto no
The private banking industry in Hong Kong continues to invest in digital tools to grow business from the next generation of wealthy clients. Over the past two years, private banks have focused their investments on technology for operations and risk management but are now investing more in omni-channel ways to interact with clients and support their relationship managers. Virtual assets, however, remains an area that private banks are not embracing. KPMG’s survey found that 81% of private banks have no plans for custody and trading of cryptocurrencies and other virtual assets. 96% of respondents want virtual assets to remain below 10% of client portfolios, and about half say client portfolios should be less than 1%. KPMG says client demand for virtual assets will therefore be met elsewhere, and not by private banks, at least not in Hong Kong.
WATI raises $23M in series B, powering WhatsApp for businesses in India
WATI has announced a $23M series B funding, led by Tiger Global with participation from existing investors Sequoia Capital India & Southeast Asia, as well as new investors DST Global Partners and Shopify. This marks Shopify’s first venture investment in a startup operating in the Southeast Asia region.The series B comes hot on the heels of an $8.3M series Around 10 months ago; in total, WATI has raised over $35M since 2020. WATI plans to use the Series B funds to scale the teams, product enhancement, and expand the customer base in India and key markets. WATI has helped businesses power millions of conversations with thousands of customers across 78 countries in just 2 years since its launch.
Most Family Offices and HNWIs Investing in Digital Assets
58 percent of family offices and high net worth individuals (HNWI) in Hong Kong and Singapore have invested in digital assets for the past two years, according to a joint study by KPMG China and Aspen Digital, a crypto asset management platform. All of the respondents that invested in digital assets owned Bitcoin while 87 percent owned Ethereum. 60 percent and 47 percent also invest in non-fungible tokens and decentralized finance tokens, respectively. Respondents were also interested in companies offering the underlying technology with 58 percent of respondents saying they were invested in digital asset providers. While the base of crypto adoption is rapidly increasing, the allocation remains relatively small with 60 percent of respondents allocating less than 5 percent of their wealth to digital assets while 54 percent say they want to allocate 5-30 percent in the asset class.
SINGAPORE
Toy collectible brand Mighty Jaxx announced a new metaverse experience
Singapore stablecoin consultation considers bank, non-bank issuers
Crypto exchange Gate.io to help Busan, South Korea, build blockchain infrastructure
Singapore plans tighter cryptocurrency rules to limit risks for retails investors
Singapore may soon require retail investors to take a test before trading crypto, prohibit credit cards
Toy collectible brand Mighty Jaxx announced a new metaverse experience
Homegrown toy collectible brand Mighty Jaxx has just announced a new metaverse experience called MightyVerse Presents: Spooky Season, in collaboration with metaverse platform The Sandbox, and collectible maker Sideshow Collectible. Spooky Season is Mighty Jaxx’s first venture into the metaverse, and will offer horror (and casual) fans alike a unique experience and crossover platform that will allow them to interact with their collectibles digitally in real life. The enhanced brand experience will be free for all to enjoy during Halloween from 28 October 2022 to 11 November 2022 on The Sandbox and serves as a prelude to the full experience, the MightyVerse. The full launch of the MightyVerse in The Sandbox will be unveiled in December 2022 in conjunction with Singapore Comic Con. Players can expect access to hidden exclusive experiences, discounts on purchase of wearables, and whitelists to future token drops, among others, in future updates.
Singapore stablecoin consultation considers bank, non-bank issuers
The Monetary Authority of Singapore (MAS) opened a consultation on stablecoins. Two of the most thoughtful aspects are how bank-issued stablecoins can co-exist with other stablecoins and how to regulate a stablecoin issued in multiple jurisdictions.The regulator plans to create a new activity, Stablecoin Issuance Service, for organizations that issue and redeem stablecoins. Banks can choose to issue stablecoins which are tokenized bank deposits, in which case there are no additional regulatory requirements given they are already regulated. This type of stablecoin will be called a regulated or securely-backed stablecoin, no matter the nature of the issuer. And for regulated stablecoins, banks will have to comply with stablecoin rules just like non-banks, apart from prudential requirements, which are already dealt with in the Banking Act. Regulated stablecoin issuers have to invest the backing assets in cash or short-term (3 month) securities issued by a governmental body with an AA-or better rating and in the same currency as the stablecoin. One approach is to get an annual independent attestation that the stablecoin meets similar standards to Singapore regarding reserves and prudential requirements in other significant issuance jurisdictions.
Crypto exchange Gate.io to help Busan, South Korea, build blockchain infrastructure
Crypto exchange Gate.io signed a memorandum of understanding (MoU) with the South Korean city of Busan to help develop blockchain infrastructure in the city.Under the agreement, Gate.io will assist Busan in developing its budding crypto industry. That assistance will include promoting the city's initiative to develop local blockchain activity and helping Busan develop, operate and distribute a local stablecoin. Gate.io will also help to establish and operate the upcoming Busan Digital Asset Exchange. Crypto exchanges Binance, Huobi and FTX have previously signed such MoUs. Busan was approved as a "regulation-free blockchain zone" by the South Korean government in 2019. As a result, the city started a push to become a blockchain hub. Gate.io also plans to expand its South Korean operations beyond Busan to stimulate the blockchain industry's growth and enhance its services nationwide.
Singapore plans tighter cryptocurrency rules to limit risks for retails investors
Singapore’s central bank outlined plans to introduce fresh measures that raise the threshold to trade cryptocurrencies for retail investors, as it reiterated the investment risks surrounding highly volatile digital assets.The proposed new rules, which would include banning monetary and non-monetary incentives such as referral bonuses for consumers, were highlighted in a set of consultation papers published by the Monetary Authority of Singapore (MAS), which also acts as the city state’s financial regulator. Among other measures, the MAS has proposed that firms should not accept credit card payments or offer credit facilities to retail investors as this could result in a “magnification of losses”.Providers of cryptocurrency services would also have to ensure that their customers have “sufficient knowledge” of the risks involved in trading, such as sharp price fluctuations and fraud or cyberattacks potentially leading to a loss of assets. The MAS suggested that would-be investors be made to take a test before they are allowed to trade.
Singapore may soon require retail investors to take a test and not use credit card payments and other forms of borrowing for trading cryptocurrencies.While “this latter option is stricter than the regulatory treatment of retail customers’ securities under the SFA38,” the central bank acknowledged, “MAS is of the viewthat the heightened risk of consumer harm in this unregulated space may necessitate stricter measures for retail customers.” Several popular crypto exchanges already require their customers to periodically sift through questionnaires before they are allowed to trade crypto and participate in derivatives trading. The central bank has also proposed that stablecoin issuers make adequate disclosures about their tokens and hold reserve assets in cash, cash equivalent or debt securities that are “at least equivalent to 100% of the par value of the outstanding” tokens in circulation “at all times.”
CHINA
Xsolla integrates Alipay support for game monetization across Asia
Could a CBDC turn the yuan into a global currency?
Alipay+ featured at SHEIN's offline popup store debut in the Philippines
Alipay enables transfers to WeChat users via QR codes
Xsolla integrates Alipay support for game monetization across Asia
Game monetization support company Xsolla has partnered with Alibaba Group’s Alipay to integrate support for their payment method into games which they monetize. With Alipay+ solutions, Xsolla can provide coverage of digital wallets and other payment methods through direct integration in the Southeast Asia market. The partnership will allow Xsolla to provide gaming partners with customer-targeted marketing promotions and reach new players by allowing them to pay for their games and in-game items with their preferred local payment methods. Xsolla works with numerous developers including Roblox, Smite and Raid: Shadow Legends.
Could a CBDC turn the yuan into a global currency?
E-CNY is only a digital form of the yuan, on par with the physical form. It barely impacts the currency's internationalization, which instead depends on the country's economic and trade heft as well as financial opening-up progress.But strategically, boosting the Chinese currency's global profile would require a robust ecosystem of e-CNY as the rise of multiple CBDCs across the world is changing the determinants of a currency's competitive edge. In late September, the mBridge platform —which explores multilateral cooperation regarding CBDC international payments —completed its first real-trade pilottest with four CBDCs including e-CNY, supporting more than $22 million in foreign exchange transactions. That amount appears to be small as official data showed the value of transactions using e-CNY in domestic pilot areas had topped 100 billion yuan ($13.8 billion) by the end of August, demonstrating e-CNY's current focus on domestic scenarios. While many developed economies focus CBDC development on cross-border payments, the emphasis of e-CNY should be put on retail payments to facilitate people making daily transactions.Declaring its intention to explore cross-border CBDC applications, the PBOC vowed in an article this month to deeply participate in international digital currency governance.
Alipay+ featured at SHEIN's offline popup store debut in the Philippines
Alipay+ and its e-wallet partner GCash were featured last week at the Philippines launch of SHEIN, the leading fashion and lifestyle global e-retailer’s first-ever popup store. The event showcased how Alipay+ utilized its payments and marketing solutions to engage the e-commerce giant and e-wallet users in a variety of online to brick-and-mortar scenarios through exclusive incentives.GCash users who visited the offline popup store and completed online payment through Alipay+ on SHEIN’s website or app enjoyed extra PHP130 off at checkout with promotion codes provided on site. Users whose online orders exceeded PHP2999 also won an exquisite magic blind box exclusively designed by Alipay+ for the four-day popup event, which started on October 20. The SHEIN event also attracted broad attention and participation from the public as those Alipay+ magic blind box winners enthusiastically shared their joyful moments at the popup store on social media, including Instagram to strike their best poses on the runway and at the photo booth with eye-catching clothes and accessories from the popup.
Alipay enables transfers to WeChat users via QR codes
Payment platform Alipay and digital payment provider WeChat have launched a feature that permits inter-platform transfers. AntGroup’s Alipay recently added a feature that permits its users to transfer sums to WeChat users, bridging the two Chinese digital payments providers.The ‘WeChat Friend Transfer’ function is a new feature launched in response to the needs of users. To perform a transfer, Alipay users first need to select the payment amount they would like to transfer. After that, the app generates a QR code that can be shared with counterparties via WeChat, QQ, Sina Weibo, or DingDing.
ASIA
JCB, IDEMIA and Soft Space launch JCBDC pilot to test CBDC in-store payments
airasai Super App partners with 50 key regional hotel groups
Southeast Asian countries have no reason to rush to launch CBDCs
Remitly expands into APAC including NewZealand and Japan
India’s Cashfree payments launches ‘Issuance’ to enable Fintechs to introduce prepaid cards
Supporting the decarbonisation transition of South-east Asia's SMEs
Stripe alights in Thailand
JCB, IDEMIA and Soft Space launch JCBDC pilot to test CBDC in-store payments
JCB, the leading international payment brand from Japan, has announced the JCBDC (JCB Digital Currency) Pilot project with IDEMIA, a world leader in identity technologies, and Soft Space, Asia's leading secure payments platform. The JCBDC Pilot will test a Central Bank Digital Currency (CBDC) payment solution and conduct a demonstration experiment with Tokyo merchants. JCB will have CBDC acceptance tested using its existing 'JCB Contactless' infrastructure - EMV-based payment merchants, POS terminals and plastic card-based user interfaces - with guidance from IDEMIA and Soft Space. JCB, IDEMIA and Soft Space will have concluded CBDC system development by late 2022 and will conduct pilot CBDC acceptance with Tokyo merchants through March 2023.
airasai Super App partners with 50 key regional hotel groups
The airasia Super App has partnered with over 50 key hotel groups from Malaysia, Thailand, Indonesia and the Philippines to help strengthen the application’s position as one of the region’s fastest-growing online travel and lifestyle platforms.The partnerships would allow the app to offer customers an extensive array of hotel options to choose from. The direct hotel partners are able to leverage AirAsia’s strong brand presence and connectivity network.The hotel platform offers consumers a choice of over 700,000 hotels worldwide, the ability to earn and redeem AirAsia points, and even to pair their flights and hotel bookings in one seamless transaction via SNAP —its hotel and flight combination package.the tourism industry, which is closely related to the aviation sector, needs to be revived more quickly after a gloomy two-year period.
Southeast Asian countries have no reason to rush to launch CBDCs
Cambodia became one of the first countries in the world to launch a central bank digital currency (CBDC) in October 2020. As adoption of Cambodia’s blockchain-based retail CBDC Project Bakong proceeded expeditiously, other Southeast Asian countries with similar financial inclusion needs and openness to digitization of financial services were expected to follow suit.As the hype around CBDCs has cooled, Southeast Asian countries are worrying less about being first movers inthis nascent field and more about if a CBDC offers them benefits that justify its costs. The Cambodian government went forward with Project Bakong because it believed a retail CBDC could accomplish three key policy objectives: boost financial inclusion—atthe time of Bakong’s launch about 75% of the population was unbanked—ameliorate digital payments infrastructure and eventually reduce the use of U.S. dollars in everyday transactions. Laotian policymakers believe a CBDC would offer them better economic data and may eventually facilitate cross-border CBDC-based settlements with China, the country’s No.
Remitly expands into APAC including NewZealand and Japan
Remitly, a digital financial services provider for immigrants, has expanded into Asia Pacific (APAC) including Japan and New Zealand.The company has helped customers send $2.5billion in remittance volume from APAC so far. Remitly is planning for further growth as access to its platform becomes available new customers in the region.Once Remitly’s new APAC send corridors are operational, customers in Japan and New Zealand will be able to send money across more than 150 corridors using Remitly’s products and network. Remitly’s disbursement network reaches 3.9 billion bank accounts, 705 million mobile wallets, 410,000 cash pickup locations, and offers home delivery in select location.
India’s Cashfree payments launches ‘Issuance’ to enable Fintechs to introduce prepaid cards
Cashfree Payments, which claims to be one of India’s leading payments and API banking solutions companies, announced the launch of Card Issuance Stack with their new solution ‘Issuance’ “to enable businesses such as fintechs and platforms to launch prepaid cards and wallets for their customers, employees and partners.”‘Issuance’ is “a prepaid card and wallet issuance API stack which can be used for payroll & incentive disbursals, customer loyalty programs, expense management among other use cases. ‘Issuance’ allows businesses to launch both physical and virtual prepaid cards.” ‘Issuance’ will “offer low-code and no-code flows to enable businesses to launch their customized prepaid card or wallet in a few weeks without deep integration with multiple entities.”‘Issuance’ enables platforms “to design and customize their own prepaid card features including assigning of spend limits, creating closed loop, open loop or hybrid payment options, facilitating minimum and full KYC prepaid cards.” ‘Issuance’ allows businesses “to launch both mono-branded and co-branded prepaid cards. ‘Issuance’ can be bundled seamlessly with Cashfree Payments’ Payment Gateway and Payouts to create a powerful tool for business.” With over 50% market share among payment processors, Cashfree Payments “leads the way in bulk disbursals in India with its product Payouts.”
Supporting the decarbonisation transition of South-east Asia's SMEs
While the urgent push to increase renewables in the energy mix continues, it is also critical to take a parallel track to help carbon-intensive industries move towards a lower carbon future. Unlike western countries whose wealth have afforded their transition into cleaner energy earlier, a fast-growing developing South-east Asian region remains heavily reliant on fossil fuels.Coming into the picture to help these companies is transition finance, an important financial tool to support their energy transition that will contribute to the overall reduction of GHG emission. In raising transition financing for projects, companies must be prepared to share a climate transition plan with the lender and relevant agencies, and how they would reach net zero emissions. The transition plan must have clearly defined timelines and a science-based de-carbonisation reduction pathway. Decarbonisation activities supported by transition finance can take different shapes and forms. Other measures include the supply or purchase of biofuels to lower the carbon content in the products they manufacture, for example sustainable aviation fuel or undertake a business transformation to provide or consume renewable energy.
Stripe, a financial infrastructure company for businesses, announced its official launch in Thailand. Stripe brings world-class financial infrastructure to solve complex payment issues that Thai businesses face today, allowing them to spend less time and resources on payments so they can focus on their core business while expanding into international markets.Thai businesses on Stripe are now able to accept payments via PromptPay, along with major credit cards like Visa and Mastercard. Any company in Thailand can use powerful Stripe solutions like Billing for subscriptions and recurring payments, Checkout and Payment Links for ecommerce, Invoicing for automated payment collection and reconciliation, Radar for fraud detection and prevention, Connect for software platforms and marketplaces, and more. Thousands of companies in Thailand have signed up on Stripe, including online property platform Baania, leading luxury furniture retailer Chanintr, holiday resort Coconut Beach Bungalows, accounting software platform FlowAccount, and digital creator platform Storior. Stripe has been working with many of these users during a beta phase over the past 12 months to gather feedback and refine solutions to meet the specific needs of Thai businesses.
BLOCKCHAIN - CRYPTO - DIGITAL ASSETS - DE FI
JP Morgan is developing a Web3 digital identity solution likely built on the bank’s Onyx blockchain
JP Morgan is developing a Web3 digital identity solution likely built on the bank’s Onyx blockchain
JPMorgan is exploring the idea of a digital wallet that would allow users to control their digital identity and assets across platforms, though the potential offering’s level of decentralization remains to be seen. The banking giant published a video detailing a planned solution enabling people to choose the identity credentials they want to share in their interactions across Web3, the metaverse and DeFi protocols. A disclaimer at the end of the video, however, notes that the digital wallet is “a proof of concept” and that there is no guarantee the company would launch such a solution.
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