Our weekly roundup of news from East Asia curates the industry’s most important developments.
Hong Kong inching close on a clear crypto regulatory pathway
A few months after prominent industry players lamented the lack of registration pathways for cryptocurrency exchanges in Hong Kong, some respite may finally be on the horizon. On Apr. 27, Julia Leung, chief executive officer of the Securities and Futures Commission (SFC) of Hong Kong, revealed that regulation of virtual asset trading platforms (VATP) remains one of the commission’s key priorities, stating:
“The SFC has received more than 150 responses to the consultation on the proposed regulatory requirements for licensed VATP operators and will issue the conclusions and final guidelines in May before the new regime takes effect on Jun. 1 2023.”
Leung also said that Web3 and blockchain technology will bring “enormous benefits to the financial industry in terms of efficiency” and reiterated the commission’s support for “underlying distributed ledger technology and responsible innovation in relation.” Nevertheless, the SFC also issued the following warning:
“The regulator takes firm and prompt enforcement action, against market manipulation activities, social media ramp and dump schemes, abusive behavior in listings, intermediary misconduct and virtual-asset-related misconduct. The amended Anti-Money Laundering Ordinance (AMLO) will give the SFC new power to combat these scams.”
In February, the SFC stirred up a crypto frenzy when it launched a consultation on its proposed regulatory requirements for digital asset trading platforms. On Apr. 20, a report published by the Hong Kong Stock Exchange daily trading volume of all Hong Kong crypto ETFs averaged about $1.19 million between December 2022 and early February.
Alibaba takes an interest in multichain
On Apr. 26, Ant Financial, an affiliate of Chinese e-commerce conglomerate Alibaba, announced during its annual Digital Technologies Developer Conference that it would officially open source its cross-chain protocol AntChain Bridge to developers worldwide.
The AntChain Bridge was designed based on the Institute of Electrical and Electronics Engineers (IEEE) Standard for Blockchain Interoperability, one of the first standardized communications protocols in this category. Yan Ying, technical director of AntChain, said that cross-chain technology “is essential to unlocking the full potential of Web3” and would allow for “large-scale transferring of digital assets.”
During a live demonstration, AntChain Bridge developers several commemorative NFTs to different blockchains. Developers can access its cross-chain systems or business smart contracts by downloading the cross-chain plug-in on the AntChain Openlab Github repository page. Two months prior, the National Basketball Association’s (NBA) Chinese subsidiary announced that it would expand its partnership with Ant Financial to mint more NFTs on its native AntChain. The blockchain was launched in 2017 with a focus on fintech.
Huawei and the GPT craze
On Apr. 27, local news outlet IThome reported that Chinese telecommunications conglomerate Huawei has filed for a national trademark application labeled “Huawei NetGPT” under the classification “scientific instruments.” Earlier this month, Huawei developers shared further insight into its other ChatGPT clone, “PanguGPT,” claiming that:
“It has entered the field of intelligent document search, intelligent enterprise resource planning, and has implemented scenarios such as enterprise financial anomaly detection, large-scale models in Arabic, etc.”
Similar to Huawei, Chinese tech giant Baidu unveiled its answer to ChatGPT, Ernie Bot, on Mar. 16. One month later, Alibaba also began testing its ChatGPT rival dubbed “Tongyi Qianwen.” Around the same day, American business magnate Elon Musk also revealed that he would create his own ChatGPT equivalent, TruthGPT, for seemingly political reasons. Chat-based large language models can have major applications in blockchain, such as auditing smart contract code or guiding its audience on crypto trading.
Chinese city public servants to receive digital yuan salaries
Earlier this week, government officials from the City of Changshu (population 1.56 million) announced that the city’s public servants would be paid in digital yuan (e-CNY) effective starting next month.
The move follows a successful pilot test beginning last October that saw select public officials receive public transport reimbursements through the digital yuan. While means of spending the e-CNY directly are currently somewhat limited on a national level, the City of Changshu has begun allowing e-CNY payments for utility bills, cell phone bills, cable TV, and public transportation.
WeChat, too, expands digital yuan adoption
On Apr. 26, Chinese social media app WeChat, which boasts over 1 billion monthly active users, expanded digital yuan adoption to its video content creation platform and “Mini Programs” platform for vendors.
According to local reports, services payable on WeChat via e-CNY now include ride-sharing, online shopping, or ordering takeaway from restaurants. To use the feature, users must first pass through know-your-customer checks. Despite its increased presence, e-CNY accounted for just 0.13% of the total Chinese Yuan in circulation at the beginning of the year.