Happy Sunday and 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
US regulators promise crypto oversight clarity
India seeks to block most cryptocurrencies in new Bill
Japanese banks to test digital currency
Australian regulator says crypto investors 'on their own' for now
Square releases white paper detailing protocol for a Decentralized Bitcoin Exchange
Crypto-focused robo-advisor TradeTogether launches service for HNWIs
Avocado Guild raises USD 18 million to transform into DAO
US regulators promise crypto oversight clarity
American banking regulators have put together a roadmap that will see them offer clarity over the next year on a host of areas relating to crypto assets. With mainstream financial services firms becoming increasingly interested in crypto, the Federal Reserve System, Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) have been scrambling to get up to speed. The watchdogs have been carrying out a series of "policy sprints" to get preliminary analysis on various issues regarding crypto-assets. Throughout 2022, guidance will be given on a range of activities conducted by banks, and what is expected in terms of safety, consumer protection and regulatory compliance.
India seeks to block most cryptocurrencies in new Bill
India is looking to bar most private cryptocurrencies when it introduces a new Bill to regulate virtual currencies in the winter session of Parliament. The government will allow only certain cryptocurrencies to promote the underlying technology and its uses. Through the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, India is also looking to make a framework for the official digital currency that will be issued by the Reserve Bank of India. Earlier this year, India's government considered criminalising the possession, issuance, mining, trading and transference of crypto assets, but a Bill was not introduced.
Japanese banks to test digital currency
A consortium of 74 Japanese firms - including the country's biggest banks - have set out plans to start testing a private sector yen-based digital currency in the coming months. Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group are among the firms from a range of industries backing the tentatively named Digital Currency JPY (DCJPY) project, which has been in the works since last year. The digital currency will be backed by bank deposits and use a common platform to speed up large-scale fund transfers and settlement among companies. The consortium has now released a progress report and a white paper. Within the consortium, different group are looking at a host of use cases such as the purchase of clean energy, retail payments, industrial settlements and NFTS, with proof-of-concept work set to begin soon ahead of a full launch in the near future.
Australian regulator says crypto investors 'on their own' for now
Australia's corporate watchdog said it was working with lawmakers to develop rules for digital currencies but warned many crypto assets remained unregulated for now, leaving investors in such products "on their own". In his first public comments since the country's largest bank unveiled plans to offer cryptocurrency trading, Australian Securities and Investments Commission (ASIC) chair Joe Longo told investors to be cautious buying products that had no protection. Earlier this month, Commonwealth Bank of Australia broke industry ranks by becoming the first main-street bank in the developed world to offer a platform for retail customers to trade cryptocurrencies. The regulator said it was working with lawmakers who have proposed changing laws to allow decentralised autonomous organisations (DAOs), which are governed by artificial intelligence rather than a board of directors, and a licensing regime for crypto exchanges.
Square releases white paper detailing protocol for a Decentralized Bitcoin Exchange
Jack Dorsey, co-founder, and CEO of both Square and Twitter, released a white paper detailing plans for Square's decentralized Bitcoin (BTC) exchange tbDEX. Unlike most decentralized exchanges, or DEXs, tbDEX will not utilize a trustless model, and therefore will not feature its own governance token. Instead, it is a message protocol designed to facilitate trust relationships without relying on a federation to control access. The tbDEX also intends to include many features that make it far less decentralized than a DEX in the truest sense of the word. The protocol requires all participants to pass background know-your-customer (KYC) checks to comply with relevant regulations depending on a user's region. Furthermore, the white paper called for the deployment of blockchain analytic solutions, either built-in to the DEX or through a third party, to track transactions on the platform.
Crypto-focused robo-advisor TradeTogether launches service for HNWIs
Digital assets platform TradeTogether has announced the roll-out of its investments platform to serve the high-net-worth individuals, family offices and institutions in Singapore. TradeTogether, operating under a regulatory exemption from the Monetary Authority of Singapore (MAS), provides investment management services related to investing in cryptocurrencies and other digital assets. Currently, only accredited investors and institutional investors are eligible to deposit funds with TradeTogether. Since its founding in September 2021, the platform has received $500,000 in pre-seed funding. TradeTogether is currently developing a mobile app, and is planning to expand across the region and in Europe in 2022.
Avocado Guild raises USD 18 million to transform into DAO
Avocado Guild, a play-to-earn (P2E) blockchain gaming guild raised USD 18 million in a Series A funding round, bringing the company’s valuation to USD 200 million. The company will use the fresh capital to scale its tech capabilities and transition to become AvocadoDAO, a decentralized autonomous organization. Avocado Guild serves as an umbrella of support for gamers, looking to develop a better understanding of Web 3.0 technology and its benefits among the community. The transition to AvocadoDAO will slowly allow the community to be in control of how the DAO’s investments and activities are run and the future direction of the Avocado metaverse. With the new funding, Avocado Guild will also recruit more team members and extend its scholarship program, which has helped benefit its community by introducing players to a range of P2E games, including Axie Infinity, and providing them with the non-fungible tokens (NFTs) required to participate in the games.
HONG KONG
HK newspaper SCMP partners with museums for historic NFTs with Flow blockchain
Mox introduces 'Payroll' account
HK newspaper SCMP partners with museums for historic NFTs with Flow blockchain
Hong Kong-based newspaper South China Morning Post (SCMP) will release archived news articles from the past 118 years as non-fungible tokens (NFTs) on Flow, the blockchain used by NBA Top Shot. The initial collection, titled ARTIFACTS by SCMP, also plans to mint versions of historical items from museums, universities, publishers, and other institutions. Over the past couple of months, many NFT initiatives have shifted away from this trend and are more centered around promoting digital artists, minting collectibles of content specifically created for the NFT. And going beyond transforming existing physical and online material into an immutable commercial asset. South China Morning Posts’ project is reverting to the concept of turning existing assets into NFTs.
Mox introduces 'Payroll' account
Mox Bank is launching ‘Payroll’, a new service allowing customers to use Mox as their default payroll account. By choosing Mox as their payroll account, customers can get more out of their salaries with Goal Savings, daily interest and real-time monitoring of activities, including instant notifications when their salary is received. The new ‘Payroll’ service brings Mox a step closer to becoming customers’ primary bank.
SINGAPORE
Singapore’s StraitsX launches rupiah-denominated stablecoin
'Buy now, pay later' startup Pace snags US$40m funding to tap Japan, Korea, Taiwan
Singapore’s StraitsX launches rupiah-denominated stablecoin
Singapore’s digital assets platform StraitsX has launched StraitsX Indonesian Rupiah (XIDR), its first Indonesian rupiah denominated stablecoin. The XIDR is on both the Ethereum and Zilliqa blockchain with each XIDR token fully backed by one Indonesian rupiah and will be supported by partners in the StraitX Ecosystem. XIDR will be issued by Xfers StraitsX Indonesia, which is an Indonesian subsidiary of Fazz Financial Group. The Fazz Financial Group has obtained licences for e-money issuance and fund transfer from Bank Indonesia. Aligned with Fazz Financial Group’s mission to empower the local community and promote the adoption of digital finance, StraitsX offers users an alternative way to perform financial transactions on behalf of the unbanked and underbanked customers.
'Buy now, pay later' startup Pace snags US$40m funding to tap Japan, Korea, Taiwan
Singapore-based Pace, which offers "buy now, pay later" (BNPL) solutions, raised US$40 million in funding from investors across Asia as it looks to use these connections to crack the region's highly competitive fintech arena. Joining Pace's Series A round were Japan's Marubeni Ventures, South Korea's Atinum Partners, Taiwan's AppWorks, and Indonesia's Alpha JWC, along with Singapore's UOB Venture Management, Vertex Ventures Southeast Asia and India, and Genesis Alternative Ventures. Founded in 2021, Pace is one of the younger and smaller BNPL players in the region. Pace currently operates in Singapore, Malaysia, Hong Kong and Thailand. It has more than 3,000 points-of-sale across the region. The fresh funds will be used to expand its technology, operations and business development, in hopes of boosting its user base and the total dollar value of online transactions on its platform
ASIA
Xiaomi partners foodpanda to drive 'quick commerce' of electronics
Japan's Queen Bee Capital inks cross-border payments deal with Nium
GoPay users can open bank accounts on Gojek’s app with Jago integration
Grab takes stake in Indonesian investment platform Bareksa
Online shopping drives expansion of alternative payments’ use in APAC
GLN partners with Liquid Group to facilitate cross-border payments
McKinsey launches Asia sustainability innovation hub with HQ in Singapore
McKinsey: Reconceiving the global trade finance ecosystem
Xiaomi partners foodpanda to drive 'quick commerce' of electronics
Foodpanda users in Singapore and Thailand will be able to shop for Xiaomi gadgets on the food delivery app and have their purchases delivered within 30 minutes, under a new "quick commerce" partnership. The partnership marks how both Xiaomi and foodpanda are increasingly focused on "quick commerce" (q-commerce) - or e-commerce with rapid delivery times - as a growth driver. Xiaomi will list products including smart devices, audio and mobile accessories and household appliances on "foodpanda shops", the section of the foodpanda app featuring groceries and other non-food items. "Beyond traditional e-commerce, brands are now already looking for the next phase of growth - with quick-commerce, foodpanda shops provides a new way for retailers to deliver their products to customers almost instantly.” said Abhishek Sahay, senior director of new verticals at foodpanda.
Japan's Queen Bee Capital inks cross-border payments deal with Nium
Global payments and card issuance leader Nium and Japanese payments company Queen Bee Capital (QBC) have partnered to enhance international transfer offerings for both corporate and individual QBC customers across Japan. Through this partnership, QBC will tap into Nium’s advanced pay-out capability to provide real-time, cost-efficient, and transparent cross-border payment solutions from Japan with 30 currencies to over 200 countries and regions, including the United States, Australia, Singapore, Bangladesh, the UK, Europe and Latin America. According to QBC’s president Shenbo Huang, the integration would make it possible for the firm to significantly enhance its global reach.
GoPay users can open bank accounts on Gojek’s app with Jago integration
Users can now open a Jago bank account through the Gojek app. With this development, Gojek is the first widely adopted platform in Indonesia to offer this type of service, making digital banking even more convenient than before. Verified users of GoTo’s payment platform GoPay can open Jago accounts without fees, and there are no minimum balance requirements. There will be no charges for moving funds between GoPay wallets and Jago accounts. This partnership will provide access for many unbanked people in the country. At the moment, one in five GoPay users don’t have a bank account or don’t use it actively, according to a recent survey by the demographic institute of the University of Indonesia. The survey, which queried 7,355 GoPay users, indicated that one in four people expressed interest to open bank accounts through Gojek’s payments service.
Grab takes stake in Indonesian investment platform Bareksa
Indonesian investment and wealth management platform Bareksa has received an undisclosed investment from Grab in a Series C round. With this funding, Bareksa will tap into Grab’s user base, merchants, and driver-partners to offer mutual fund investments. Payments related to these features will be handled by Ovo, which invested in Bareksa in 2019. Grab owns a 90% stake in Ovo and this investment deepens its operational integration with Ovo’s ecosystem. According to data compiled by the Indonesian Central Securities Depository, or KSEI, the number of retail investors in the country has grown to more than 6 million by August 2021. The majority of retail investors purchased mutual funds, which are deemed to carry lower risk than stocks. The integration of Grab, Ovo, and Bareksa may accelerate the development of Indonesia’s retail investment and wealth management landscape.
Online shopping drives expansion of alternative payments’ use in APAC
Alternative payments have gained significant prominence amongst online shoppers in the Asia Pacific (APAC), with e-commerce payments expected to increase at a compound annual growth rate (CAGR) of 12% to reach $4.3t in 2025, according to a study by GlobalData. An accelerated shift towards online shopping among consumers has led to an estimated increase for e-commerce payments in APAC by 16.7% in 2021 to reach US$2.8t. The rising smartphone penetration coupled with a large unbanked population has helped in the growth of alternative payments in the region. China’s alternative payment solutions alone are set to account for more than 70% of the e-commerce transaction value in 2021, increasing from 51.2% in 2017. A similar trend could reportedly be seen in other Asian markets like India, Hong Kong, Australia, and the Philippines.
GLN partners with Liquid Group to facilitate cross-border payments
GLN International Inc, a global payment network that facilitates cross-border mobile payments for digital wallets and banking applications, has partnered with Liquid Group, a cross-border digital payments provider. The companies announced their collaboration to supercharge cross-border payments, leveraging on both companies’ networks. Users of GLN’s digital wallet members will be able to make mobile payments, enjoying the best currency exchange rates, at Liquid Group’s merchants in Singapore. The collaboration between GLN and Liquid Group will start with the commencement of the quarantine-free travel arrangement between South Korea and Singapore and expand to various markets along with the re-opening of international travels.
McKinsey launches Asia sustainability innovation hub with HQ in Singapore
Global consulting firm McKinsey & Company launched a sustainability innovation hub for Asia, headquartered in Singapore. The hub, named Vivid, aims to help governments and businesses navigate the risks and opportunities in the transition to a more sustainable future. McKinsey said the launch is part of the firm's expansion in Asia and acceleration of its client services focused on the implications of climate change and the economic transformation net-zero carbon goals entail. The launch of the hub comes on the back of McKinsey's recent acquisition of Vivid Economics, a strategic consultancy with broad sustainability and macroeconomic capabilities. The firm also acquired Planetrics, a climate analytics suite that helps quantify, report and manage climate risks.
McKinsey: Reconceiving the global trade finance ecosystem
A recent Asian Development Bank study estimated that the gap in trade finance availability reached $1.7 trillion in 2020. Disruptions fueled by the COVID-19 pandemic are widely acknowledged to have exacerbated this shortfall. MSMEs serve as the backbone of economies around the globe and account for over 95 percent of firms and 60 to 70 percent of employment, suggesting that a healthy trade ecosystem requires thriving MSME. Three significant pain points faced my MSMEs include access to liquidity, the complexity of trade finance transactions and the challenges MSMEs suppliers face searching for new clients and revenue sources that are essential to their growth. The overarching vision is to build on the collaboration already gaining momentum among participants in the trade ecosystem, address gaps in existing operating models, and, most importantly, promote wider adoption through further coordination. If the global trade finance community can be inspired to cooperate, the joint objectives—and an equitable distribution of benefits—are well within reach.
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