What The FinTech #88: 20 Mar 2022
Happy Sunday, welcome back to What The FinTech, your regular FinTech & Innovation Newsletter focusing on Hong Kong & Asia ! Here are the selection and the top headlines for this week.
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What was the FinTech this week in: 📰
BLOCKCHAIN - CRYPTO - DIGITAL ASSETS - DE FI
Hong Kong: Letter to Virtual Asset Industry
On 17 March, the HK Secretary for Financial Services and the Treasury (Christopher Hui) published a blog post on the virtual asset (VA) industry in HK. The HK Gov’t, HKMA & SFC have rolled out measures for virtual assets, including:
Establishing a license regime for VA service providers (VASPs)
VA exchanges should be subject to same requirements and obligations that apply to traditional FIs
This will be implemented through the AML & CTF Ordinance (AMLO) framework
All VA exchanges are required to apply for a license from the SFC before providing services in HK
Both securities-type VAs and non-securities VAs (e.g. Bitcoin) are subject to licensing
Requirements will also be taken into account on potential risks such as system failures and cybersecurity
Contemplating the regulation of payment-related “stablecoins”
Jan 2022: HKMA initiated consultation exercise to seek views from sector
Whether there is a robust mechanism for supporting stablecoin value
Potential impact of stablecoin on real economic activities in case of disruption of its payment function
Request for FIs to read HKMA’s whitepaper on crypto-assets and stablecoins and provide comment
Providing financial institutions with guidelines on offering VA-related services to clients, such as::
Distributing VA-related products
Providing VA dealing services
Providing VA advisory to clients
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Siam Commercial Bank opens metaverse HQ
Siam Commercial Bank's technology arm SCB 10X is moving into the metaverse by opening a HQ in the Sandbox, a blockchain-based virtual world platform. This follows JPMorgan, that in February opened its Onyx lounge - complete with roaming tiger - in blockchain-based Decentraland to coincide with the publication of a paper on the opportunities presented by the metaverse. Likewise, Siam Commercial Bank will mark its launch by hosting a virtual summit and workshop to highlight the creative possibilities in the future virtual economy.
Aussie fintech to offer mainstream direct access to DeFi with a fixed rate
Australian fintech Block Earner offer investors a 7% fixed rate investment product by utilizing DeFi technology. Block Earner works by converting Australian dollars into a United States dollar Stablecoin (USDC). Block Earner lends that USDC into two primary DeFi protocols called Aave and Compound, which provides investors with a yield. Block Earner chose stablecoins like USDC for security and stability over other coins. Block Earner is registered with Australian financial intelligence agency AUSTRAC and protects investors’ funds with Fireblocks, one of the world‘s largest digital custodians.
Articles that may interest you on this subject:
EU crypto proposal seen as de-facto Bitcoin ban fails in vote => here
Crypto exchanges face 'fork in the road' over Russia => here
LA Token launches LACHAIN to bridge Ethereum-based networks => here
NFTs are coming to Instagram, Zuckerberg says => here
Amex files metaverse-related trademark applications => here
HONG KONG
Hong Kong’s Adrian Cheng backs Web3 future with more investments in Crypto and Blockchain firms
Animoca co-leads $88m funding for Hex Trust digital asset custody
HSBC buys virtual plot of land in the metaverse
Hong Kong’s Adrian Cheng backs Web3 future with more investments in Crypto and Blockchain firms
Adrian Cheng, CEO of Hong Kong real estate giant New World Development, has added crypto custody provider Hex Trust and blockchain infrastructure developer ConsenSys to his investment portfolio, increasing his bets on what could be the future of the internet–commonly referred to now as Web3. He had taken part in the $88 million funding round of Hong Kong-based crypto custodian Hex Trust, which says it already has more than 200 institutional clients and over $5 billion in digital assets under management. The capital injection was led by local blockchain gaming company Animoca Brands and Liberty City Ventures, and drew participation from investors including blockchain firms Ripple and Terra, as well as Primavera Venture Partners and Morgan Creek, among others.
Animoca co-leads $88m funding for Hex Trust digital asset custody
Hex Trust plans to deploy the capital amassed from Animoca Brands and other investors towards expanding its footprint and scaling its operations. So far, Hex Trust has over 100 employees across offices in Hong Kong, Singapore, and Vietnam. The crypto custodian plans to infuse the fresh capital to expand across Europe and the Middle East and rake in additional licenses. It also aims to continue the development and innovation of Hex Safe™. Improving its new business services such as financing and structured solutions are also under Hex’s game plan.
HSBC buys virtual plot of land in the metaverse
HSBC has become the latest financial institution to venture into the metaverse, acquiring virtual real estate in The Sandbox. HSBC will reportedly focus on financial literacy offerings and intends to use its plot of land to engage and connect with sports, esports and gaming enthusiasts. HSBC's entry to The Sandbox follows that of Thailand's Siam Commercial Bank (SCB). In February, JPMorgan became first bank to open a lounge in the Decentraland virtual world. Meanwhile, American Express has filed trademark applications to register its name, logo, and slogans for a range of banking services in the metaverse.
SINGAPORE
Digital Treasures Center Gets In-Principle Approval by MAS for Digital Payment Token Services
Crypto platform Hodlnaut gets MAS nod for Major Payment Institution licence
Paxos Secures MAS’ In-Principle Approval for Digital Payment Tokens Services
S’poreans who earn via NFT transactions or tradings will soon have to pay income tax for it
Digital Treasures Center Gets In-Principle Approval by MAS for Digital Payment Token Services
The Monetary Authority of Singapore (MAS) has granted in-principle approval to Digital Treasures Center (DTC), a payment company based on distributed ledger technology (DLT). With a license under the Payment Services Act to offer Digital Payment Token services, DTC will be able to provide fiat-to-crypto pairing. This allows merchants to accept cryptocurrencies—including Bitcoin, Ethereum and Tether—and convert them into fiat including SGD and USD. Once DTC has fulfilled all the criteria listed under the approval, the company will be able to offer account issuance, merchant acquisition, domestic money transfer, cross-border money transfer, e-money issuance as well as digital payment token services. This follows the in principle approvals granted by MAS to crypto platform Hodlnaut and blockchain infrastructure platform Paxos in the past week.
Crypto platform Hodlnaut gets MAS nod for Major Payment Institution licence
The Monetary Authority of Singapore (MAS) has given in-principle approval to cryptocurrency platform Hodlnaut for a Major Payment Institution licence. The licence regulates Hodlnaut's token swap feature, not the digital payment token lending or borrowing services. Token swaps allow users to exchange cryptocurrencies, for instance from Bitcoin to Ethereum. The cryptocurrency platform will be working towards meeting the requirements of a full Major Payment Institution.
Paxos Secures MAS’ In-Principle Approval for Digital Payment Tokens Services
Paxos, a regulated blockchain infrastructure platform, announced it has received in-principle approval from the Monetary Authority of Singapore (MAS) to operate digital payments token services under the Payment Services Act. With this license, Paxos is now able to offer its digital asset and blockchain products and services to customers domiciled in Singapore. The license will also help Paxos to support its current partners in expanding their services into Asia.
S’poreans who earn via NFT transactions or tradings will soon have to pay income tax for it
Individuals who derive income from non-fungible token (NFT) transactions or from trading in NFTs will have “prevailing income tax rules” applied to them. The income tax treatment “will be determined based on the nature and use of the NFT”. NFTs are tokens that are used to represent ownership of unique items. Things that can be tokenised on the blockchain include art and collectibles. However, capital gains will not be taxed. Even though the individuals may also derive capital gains from the NFT transactions, as Singapore does not have a capital gains tax regime, such gains will not be taxable.
CHINA
China moves to curb use of celebrities for promotion of financial products
Tencent-backed WeBank Bombarded with User Complaints
China moves to curb use of celebrities for promotion of financial products
China’s banking watchdog will strengthen rules governing the marketing of financial products, particularly the use of celebrities to promote loans or investment products. The regulator will also tighten curbs on illegal charges levied by commercial banks on firms, especially small and medium-sized enterprises, micro enterprises and sole proprietors. Tighter regulation by the CBIRC is expected to enhance protection for investors and customers of financial firms. It is common practice for these companies to find a celebrity to promote their problematic loans or investment products.
Tencent-backed WeBank Bombarded with User Complaints
Tencent-backed WeBank ranked first on the weekly blacklist for the first week of March and second for the first quarter of 2022. In the past 30 days, this online-only bank received 334 complaints, of which 12 have been handled and one marked as completed; cumulatively, 6,137 complaints were lodged against WeBank, 85 were dealt with and two flagged as completed.
ASIA
7-Eleven stores in Japan trial holographic payment terminal
Open banking’s true story in Asia: emerging markets
Superapp GoTo Files to Raise $1.1B in Indonesia IPO
Credit Cards Are Losing Allure in Asia
Funding Societies Taps MatchMove to Power Real-Time Fund Requests for Its Virtual Card
Bank Rakyat Indonesia moves into open banking with Ayoconnect
7-Eleven stores in Japan trial holographic payment terminal
Customers at six 7-Eleven stores in Japan can now make contactless payments using a holographic screen projected from the self-checkout terminal. Developed by Toshiba, the Digi POS system creates the illusion of a touchscreen interface hanging in the air in front of a shopper. The holographic displays are equipped with Neonode’s Touch Sensor Modules that make it possible to interact with the images projected by the vitrual touchscreens mid-air. Customers scan the products in their cart and then select their preferred payment method and confirm the transaction on the floating screen without needing to touch the self-checkout kiosk directly.
Open banking’s true story in Asia: emerging markets
Open banking in Asia has been slow or stalled – in the developed markets. In Asia’s emerging markets, open banking could become a much more powerful driver of disruption and change to traditional consumer and SME banking. DigFin is profiling fintechs in three countries that show the potential for open banking: Indonesia, Philippines, and India. Open banking is about using application programming interfaces (APIs) to connect customer data between financial institutions (banks) and third parties, including fintech companies and companies with customers, like e-commerce platforms.
Superapp GoTo Files to Raise $1.1B in Indonesia IPO
Superapp GoTo has filed to raise at least IDR15.2 trillion, or around $1.1 billion, in an initial public offering (IPO) on the Indonesia Stock Exchange. GoTo was created by merging two of Indonesia’s tech giants – ride-hailing firm GoJek and e-commerce player Tokopedia, creating a superapp combining e-commerce, transportation and financial services. GoTo has also integrated its payment services with other financial players, such as wealth management app Pluang to boost financial services inclusion for Indonesia’s large unbanked economy. GoTo has attracted an all-star cast of investors, raising funds from Singapore sovereign wealth fund GIC, Malaysian sovereign wealth fund Khazanah, Alibaba Group, Softbank Vision Fund, Google, Tencent Holdings, Abu Dhabi Investment Authority and Fidelity International.
Credit Cards Are Losing Allure in Asia
The latest Global Payments Report 2022 from Worldpay by FIS projected credit cards would lose wallet share of consumers’ payment options in Asia by 2025, particularly for e-commerce. In Singapore, credit/charge cards remained the leading online payment method last year, accounting for 42 percent of e-commerce transaction value, followed by digital wallets at 29 percent and bank transfers at 12 percent, the report said. But with the rise in popularity in superapps like Grab digital wallet, the report projected by 2025, digital wallets and bank transfers would grow to become 31 percent and 11 percent, respectively, of e-commerce transaction value in Singapore. Credit and charge card's market share of e-commerce transaction value in Singapore is expected to fall to 38 percent by 2025.
Funding Societies Taps MatchMove to Power Real-Time Fund Requests for Its Virtual Card
Southeast Asian SME digital financing platform Funding Societies has selected Banking-as-a-Service (BaaS) provider MatchMove to offer virtual card solutions to their Micro, Small, and Medium-size enterprises (MSME) clients in addition to their approved loans at affordable interest rates. Funding Societies looks to provide MSMEs in Singapore with a comprehensive suite of financial solutions including affordable short-term unsecured business financing, credit lines, and expense management tools. Using the MatchMove-enabled Mastercard-branded Elevate card, Funding Societies will extend interest-free credit lines to MSMEs on the virtual cards for a period of up to 55 days. Funding Societies had rolled out the Elevate virtual card earlier this month where approvals of applications are given within one business day and no personal guarantees are required for limits under S$30,000.
Bank Rakyat Indonesia moves into open banking with Ayoconnect
Ayoconnect, Southeast Asia's largest open finance platform, and Bank Rakyat Indonesia (BRI), Indonesia’s largest bank by total assets, have signed a memorandum of understanding (MOU) to leverage on Ayoconnect’s open finance technology in BRI’s digital banking solutions with the intention to generate greater financial inclusivity and economic growth in Indonesia. Ayoconnect’s open finance platform makes it easier, faster and more economic for BRI and its business customers to launch new financial services, accelerating the availability of affordable access to finance for all Indonesian citizens.
FUNDRAISING & PARTNERSHIP IN APAC
Financial wellness platform Wagely raises $8.3m => here
DeFi startup Treehouse clinches US$18m in seed round => here
Moove raises $105M to scale its vehicle financing product across Asia, Europe and MENA => here
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