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You are here: Home / Archives for China

China

Japan geared up to launch native CBDC as it takes cues from steps taken by China

January 1, 2021 by Akash Anand

The concept of cryptocurrencies started as a nascent idea but has now spread into a global phenomenon. It is not just the mainstream cryptocurrencies like Bitcoin and Ethereuym that are doing the rounds but rather centralized cryptocurrencies launched by state governments.

China was the first country to take centrally backed cryptocurrencies seriously, especially with the creation of the digital renminbi. Looking at the steps taken by the red dragon, other countries such as Japan were coming to the forefront to voice their contributions using Central Bank Digital Currencies [CBDCs].  

CDBCs are generally used for cashless payments through a smart device such as a mobile phone or tablet. The main intention of a digital currency is to eliminate the overheads and wastage related to physical fiat currency. Former Bank of Japan officials stated that China’s efforts in the ecosystem inspired other regions to follow suit.

The People’s Bank of China has been the pioneer in terms of building a digital trading ecosystem with officials also responsible for releasing coherent updates. Hiromi Yamaoka, an ex-official at the Bank of Japan commented:

“China has prompted moves toward digital currency (around the world). t (has done so at) surprising speed, as central banks tend to take a cautious stance. The design of a CBDC is very tricky and delicate. In advanced countries, a CBDC could conflict with existing payment and banking systems.”

Banking officials in Japan were confident that introducing native digital currencies in a major way would only uplift the financial situation of the country. The proposed method is to give the Japanese population a trading limit access of 50,000 yen per person. This would result in a total trading volume of 5 trillion yen, a figure that would account for just 5 percent of the total Japanese capital circulation.

Digital Currency Forum, a popular advocate of digital currencies in Japan revealed that there were plans to create “some form” of digital currency by 2023. Banking officials were of the opinion that if Japan does not launch a CBDC soon, it may lag behind other major countries in the race towards a streamlined digital economy.

Filed Under: Industry, News Tagged With: CBDC, China, Cryptocurrency, Japan, news

Fintech Will be Catalyst for Innovation and Growth, says OneConnect CEO

December 24, 2020 by Akash Anand

Over the years, the financial world has grown in numerous ways, with the most visible shifts occurring in the way traditional bodies have embraced emerging technology. This has been realized by Fintech organisations as the ideal jumping point for transitioning to a more developmental point of view.

The latest company to recognize the promise of fintech was OneConnect Financial Technology, with its Chief Executive, Ye Wangchun, creating major positive prospects. OneConnect’s head honcho gave his two cents on the rising fintech industry at the fourth annual China Digital Banking Forum.

The general consensus that Fintech developments could go hand in hand with traditional bodies was formed during the discussion. The Forum featured more than 300 industry experts, researchers and media professionals who were tasked with increasing the popularity of the fintech industry. Ye Wangchun told prestigious participants that major banking institutions need to accelerate their digital transformation strategies, which would go a long way towards creating an active trading ecosystem.

Ye believed that the Fintech industry had become a driving force in raising small and large-scale banks. Reports have shown that the rate of adoption by the Fintech industry has increased from 16 percent in 2015 to a total of 64 percent in 2019. China was the market leader in terms of fintech adoption, as the South Asian superpower had fintech tendrils in 84% of all industries. Ye made his statements at a time when OneConnect was making long-term expansions to regions like Malaysia. The company had also acquired a digital banking license from the Hong Kong Monetary Authority.

The CEO of OneConnect confidently claimed that the adoption of fintech was like moving from the production of spare parts to the creation of the entire vehicle. He also called for further involvement of the Internet Finance Association of Small and Medium-Size Banks in order to also monitor the rules and regulations. One of the main agendas of the forum was to bring together the brains of the dignitaries and to find solutions to the current financial situation.

Filed Under: Fintech Tagged With: China, Fintech, news, oneconnect

China’s Digital Yuan Sees 20K Transactions Within 24-Hrs On E-commerce Platform

December 14, 2020 by Reena Shaw

China’s new sovereign digital currency, Digital Yuan has become a hot topic around the world. In the latest development, close to 20,000 transactions were paid for with Digital Yuan within 24 hours through e-commerce company JD.com as it conducted a real-world trial.

The residents of the country actively participated in the trial of its digital currency in Suzhou, a city in East China’s Jiangsu Province and the largest online payment reportedly surpassed 10,000 Yua 80% of the participants for the trial were made by the younger generation who were born between 1980-1990.

JD.com was not the only platform that participated in the trial. There were nearly 10,000 physical shops in Suzhou that took part in the real-world trial for Digital Yuan at the “Double Twelve” shopping festival.

Cao Yin, who happens to be the Managing Director of the Digital Renaissance Foundation in Shanghai was quoted saying,

“As far as I know, the PBC is also hiring talent from a lot of private digital currency firms and internet companies to develop the digital currency. It hopes to implement the digital yuan using market-oriented means”

However, despite the fact that China has become the frontrunner in developing its central bank’s digital currency [CBDC] as it is currently deploying it on major e-commerce platforms within the country, the process has been cautious and not hasty. And it was something that Yin himself stressed.

Scaling Digital Yuan

China is gearing up for the implementing Digital Yuan on a massive scale and was looking to use the digital currency at the 2022 Winter Olympic Games.

This was part of the pilot programs launched by the People’s Bank of China back in April in cities such as Shenzhen, Chengdu, Suzhou, and Xiongan. Till last month, the programs had conducted more than 4 million transactions, which roughly totaled to $300 million,

Previously, reports regarding Hong Kong’s central bank working with the People’s Bank of China for the trial use of the Digital Yuan emerged. This was the first instance of China’s central bank digital currency’s use outside the country, this initiative was for the purpose of cross-border payments.

Filed Under: World, News Tagged With: China, Digital yuan

China’s Fintech Firms Struggle As Govt Steers Towards Imposing Severe Rules

November 27, 2020 by Sahana Kiran

China has been spearheading the innovation of finance and technology. Chinese business magnate, Jack Ma has been catching the eyes of many with his big moves in the fintech sector. However, Ma was seen making news over a set back that was caused by the government that further disrupted his intention of listing the Ant Group’s $35 billion IPO was put on hold.

China’s Big Takedown

Jack Ma wasn’t the only one to bear the wrath of the suspension of the IPO, several companies including, Richard Liu’s JD Digits Technology Holding, Lufac Holding were also subject to the sector-wide IPO crackdown. Ma’s online lending platform, Ant was shown the door and the regulators were ordered to be more severe with the same. While several believes that the latest move of the government was to reboot the existing regulatory environment, it was pointed out that it was all a part of China’s transition that entailed keeping the technology giants in check.

Analysts across the globe were inclined towards the fact that China intended to send a message to its fintech firms as financial stability is mostly political in the country. A Washington DC-based analyst, Sean Ding told Bloomberg,

“The whole point of sending such a strong message is for future fintech companies to be more careful, understand that their products can bring about financial risk.”

Chinese President Xi Jinping Strikes

In an article shared by a banking regulator, President Xi Jinping’s intention about the regulatory climate is highlighted. The Chinese President had reportedly dared to master their supervisory position. With China’s online lending market as its first priority, the government began imposing rules that are severe and outrightly bringing down platforms. Reciprocating the government’s latest move, Ant decided to relax the velocity at which it packages current loans into asset-backed securities that would be sold to the investors.

While Ant has been working with the regulators to work things out, Kevin Kwek, a Singapore-based analyst suggested that investor sentiment would be more restrained when the online lending platform returns to the market.

Another platform that had also filed an IPO with the Shangai Star Market had endured a similar setback. JD Digits had an intention of entering the market with its IPO in the first had of 2021, however, this target has become a task following the government’s latest takedown. Furthermore, another platform, a newly listed one, Lufax was substantial proof of the drawbacks of going public at times of uncertain regulatory climate.

The platform was reportedly listed for lesser in the prior funding round. The post further read,

” [It] allowed existing shareholders to swap their stock into convertible bonds to make up for potential losses, according to people familiar. The lender has seen its stock swing violently since it recent debut as it’s become a target for short-sellers.”

While JD Digits has been in talks with the regulators, Lufax seems to be making amends already. Back in September, Lufax reportedly lowered the fees by further decreasing the clients’ costs. The platform has even commenced offering credit guarantee options from a wide range of insurance partners in order to make sure the customer has an increased choice.

While transparency has always been a huge deal in the world’s most populated country, the head of Asia investment strategy at Citigroup Inc.’s private-banking arm, Keng Peng told Bloomberg that the investors could be uncertain about the transparency pertaining to the financial regulations in the country. Keng added that regulations take time to adapt, and scrutinizing fintech firms seem to be the latest interest of the Chinese lawmakers.

Filed Under: Fintech, News, World Tagged With: China

Malaysian Crypto-Exchange Suspends Listing of LongBond’s $3 Billion Blockchain Bond

November 24, 2020 by Reena Shaw

A blockchain bond worth $3 billion has been withdrawn from a Malaysian cryptocurrency exchange. The said bond has been arranged by the tier-1 branch of Beijing-headquartered China Construction Bank Corporation [CCB] unit using blockchain technology.

According to the latest reports, the bond was withdrawn at the request of the issuer – Longbond Ltd,  which is a special purpose vehicle created for the purpose of issuing digital bonds and deposit the proceeds with CCB’s branch in Labuan, a Malaysian offshore financial center.

The listing sponsor and the lead manager of the bond in question was CCB Labuan and it was to be tradable on the FUSANG exchange, which happens to be a platform that trades digital assets such as Bitcoin, as well as Security Token Offerings [STOs], the report said.

It is important to note that the listing was originally scheduled to go live on the Exchange on the 13the of November. However, as just before the listing time, FUSANG revealed receiving written communication from the Listing Sponsor on behalf of the Issuer, where it requested for the postponement of the Listing. Three days later, on the 16th of November, the exchange formally wrote to the Listing Sponsor to ask for a reason as to the postponement, as well as the updated timeline for the Listing. But the Listing Sponsor responded on the 20th of November that it had “decided not to proceed”.

The Blockchain Bond in brief:

According to FUSANG, the aim of the bond was to give investors access to bank-secured deposits at an annualized rate of LIBOR +50 bps [~0.70 %]. This figure is significantly higher than the market interest rate for typical fixed deposits. The platform asserted that the bond would offer retail investors access to an investment that was previously unavailable to them, while at the same time bringing legitimacy and investor confidence to the world of cryptocurrency and decentralized finance.

Additionally, the bond was supposed to be issued at a discount and can be traded on FUSANG Exchange prior to maturity, in US Dollar and Bitcoin with a total program target size of $3 billion.

As revealed by the FUSANG Chief Executive, Henry Chong, the bank had not provided a reason for suspension of the same. Chong went on to say that,

“While we are disappointed that this Listing has been suspended, there were no legal, regulatory, operational, or technical issues with the FUSANG platform or the IPO process and filing. The overwhelming investor interest and demand for this landmark USD 3 billion program has been a fantastic validation of the digital issuance and listing process that we have created, and it is unfortunate that the Listing Sponsor has decided that they are unable to proceed with this Listing”

Filed Under: Blockchain, Bitcoin News, News Tagged With: Blockchain, bond, China

China Refocuses its Fintech Directives as Government Looks to Launch Regulations for Lending Companies

November 18, 2020 by Akash Anand

Over the last few years, the world of fintech has changed, with many traditional institutions taking a keen interest in the industry. As the blockchain sector shed more light on the usability of integrating technology with finance, even state governments stood up to take note of what was happening.

China has been heavily involved in the fintech space for some time now and its premier has made it clear that it aims to move forward all guns blazing. The same Chinese government recently played a role in halting Ant Group’s $38 billion IPO at the last minute as questions arose about the country’s growing lending problem.

Financial lending in China has grown multifold in the past few years with an increasing number of youngsters joining the roster. Young people under the age of 25 start borrowing early in their lives, causing them to fall into the loop of paying interest for the rest of their lives. This sort of unregulated lending and borrowing seems to be the issue that the Chinese government wants to tackle first.

Reports have shown that people in China borrow from a variety of fintech companies, some of which may be shady and reclusive. One 24-year Chinese student spoke about the qualms of borrowing in small sums by pointing out that:

“Now it’s like I’m in a whirlpool. I can only pay it back slowly, one small sum at a time, and after that, I will have no savings. So, the whirlpool makes me keep borrowing more and more.”

Officials within the fintech industry believe that there are two sides to the leading story: it can democratize financial products but at the same time be a risky venture depending on the lender. Ant Group was one of the major companies that grew during the lending boom with that part of the business growing by almost 60 percent in the first six months of this year. Ant’s lending arm also contributes 40 percent to the total revenue of the company.

The only way the industry can grow under the watchful eyes of the Chinese government is to comply with the incoming regulations. Popular economists also claimed that microlending platforms need to be regulated as “they have evolved more like a Ponzi scheme”. Only time will tell what type of lending companies will the government let off scot-free.

Filed Under: Fintech Tagged With: ant group, China, Fintech, news, regulations

Fintech Gets Another Boost from China as Standard Chartered Completes Cross-Blockchain Trade with Hong Kong

November 6, 2020 by Akash Anand

Blockchain solutions have taken the world by storm over the past couple of years with multiple integrations with several sectors. Organizations were not the only ones utilizing the technology as state governments have also taken a keen liking to the not-so-niche industry.

China is one of the major regions taking a deep dive into the technology with multiple areas testing out different versions of blockchain. Recently, Standard Chartered Bank announced the completion of a cross-block transaction between Hong Kong and China, marking a major step forward in the area.

The original transaction was conducted between the People’s Bank of China Trade Finance Platform in China and the eTradeConnect platform in Hong Kong. Earlier releases had pointed to the usage of the digital Yuan for this very same purpose but there was no mention about it in the latest move. China’s lean towards a digital yuan made massive headlines in 2019 as it made the first P5 country to adopt blockchain wholeheartedly.

Hong Kong Monetary Authority Executive Director Colin Pou claimed that the adoption of new technologies would make large scale transactions much more seamless and safer. He added:

“The Proof-of-Concept trial (PoC) that connects eTradeConnect and the PBCTFP aims to provide importers and exporters in both places with more convenient trade finance services.”

Standard Chartered’s experience in the blockchain industry can be traced back to the formation of the seven bank association testing cross border transactions. The other members who participated in the fund transfer were the ICBC, Bank of China, and Bank of Communications (including Hong Kong subsidiaries). China’s increased focus on the blockchain has also forced other countries to sit up and take notice of the newly burgeoning industry. The Red Dragon had previously conducted internal tests within Guangdong, Macau, and Hong Kong.

Hong Kong and China began work on blockchain solutions over a year ago while creating a framework for Central bank Digital Currency [CBDC]. The eTradeConnect partnership is operated by Chinese firm Oneconnect with the intention of scaling the blockchain usage. There are also plans to expand the platform utilities to regions such as Europe and the rest of the Asian market.

Filed Under: Blockchain Tagged With: Blockchain, China, etrade connect, Hong kong

China’s Stance on Cryptocurrency Remains Critical As New Details Emerge

November 3, 2020 by Reena Shaw

China has been sitting in the driver seat when it comes to leading blockchain technology and bolstering towards the relentless global domination quest of its national currency. But things become complicated when there is “virtual currency” or cryptocurrency in the picture.

According to the latest development, selling crypto purchased with the Renminbi [RMB] to withdraw foreign currency could be considered money laundering. In addition to that, selling crypto purchased with foreign currency to withdraw RMB could also likely be deemed money laundering.

NEW: Chinese state media suggests that selling crypto purchased with RMB to withdraw foreign currency could be considered money laundering, as would selling crypto purchased with foreign currency to withdraw RMB. https://t.co/UYR1nJlidx… pic.twitter.com/0Tm9k73lmP

— LongHash (@longhashdata) November 3, 2020

The report was loosely translated from the Chinese media platform, People’s Daily which explicitly stated,

“The holder buys “virtual currency” in China by paying in RMB, and then sells it in foreign currency in any form, or the holder buys “virtual currency” overseas by paying in foreign currency, and then passes any The form of selling and cash withdrawal is RMB. Under the above-mentioned circumstances, no matter how many currency-to-currency transactions are converted between buying and selling, it essentially violates China’s foreign exchange control regulations and is suspected of money laundering crime”

The report further went on to mention that if a Chinese citizen sells and cashes out “virtual currency”, regardless of the region and currency, as long as there is a profit, the individual must declare personal income tax to the Chinese tax authority. If the tax declaration is not filed, it could be suspected of Tax evasion.

Cryptocurrency Rules in China

According to the Library of Congress, China does not recognize cryptocurrencies as legal tender. The country’s banking system does not accept cryptocurrencies or provide relevant services. Notably, China has carried out a series of regulatory measures to crack down on activities related to the crypto industry citing the reasons as investor protection and financial risk prevention.

Those measures include announcing that initial coin offerings [ICOs] as illegal and restricting the primary business of cryptocurrency trading platforms. Despite the fact that China dominates the Bitcoin mining scene, the government has also discouraged mining in the country.

Digital Yuan

China’s stance on cryptocurrencies, in general, might be strict but not when it comes to digitizing its national currency. Its digital yuan pilot program has been picking up the pace which was rolled out for extended testing in four cities. According to reports, there have been more than 4 million transactions, totaling over 2 billion Yuan or $299 million in the digital currency so far.

Filed Under: News Tagged With: China, Digital yuan

Chinese Tech Giant Huawei Rolls Out Smartphone That Aids The Digital Yuan

October 31, 2020 by Sahana Kiran

Unfettered by the abject pandemic, China continues to outsize other countries with regard to the development of the Central Bank digital currency  [CBDC]. As many governments are only getting started on CBDC research and development, China is way ahead in the game.  A recent update from the country revealed the digital yuan’s latest association.

Digital Yuan Finds Shelter At Huawei

Telecommunications equipment company, Huawei is one of China’s biggest assets, the platform revealed its support for the country’s CBDC by rolling out a smartphone that aids the digital yuan. In a recent press conference, the tech giant announced that the Huawei Mate 40 was equipped with a built-in hardware wallet for the digital yuan.

The CEO of the platform for the consumer business wing, Yu Chengdong affirmed that the Huawei Mate 40 was the first of its kind as no other smartphones had enabled support for China’s yet to be launched CBDC.

Furthermore, the Chinese tech giant affirmed and elaborated on the same in a Weibo post. Huawei’s post read,

“The Mate 40 series is the first smartphone that will support digital yuan hardware wallets, featuring hardware-level security, controllable anonymous protection and dual offline transactions – for a novel, safe and convenient payment experience.”

While countries have just begun carrying out research on central bank digital currencies, China seems to be past the testing stage. The Mate40 smartphone was reportedly rolled out to enhance the effectiveness of the Chinese digital yuan on mobile phones. Despite the fact, that this is a huge advancement for the country as well as the tech giant, the smartphone’s ability to convert fiat into a physical-digital yuan wallet is still uncertain.

Huawei’s association with the digital yuan goes way back as the platform was one among the twenty other companies that had aided the development of China’s CBDC. Several other tech platforms had also collaborated with the Chinese government for the development of the CBDC, however, Huawei seems to be the first to roll out a smartphone as such. The Huawei Mate 40 smartphones were undoubtedly a hit as they sold out in 28 seconds in the Asian country.

Filed Under: Fintech, News, World Tagged With: CBDC, China, China's Digital Yuan

China Denies Appeal And Locks In Fraudsters Part Of $1.1 Billion Crypto Ponzi Scheme

October 30, 2020 by Sahana Kiran

The Chinese have been taking over the crypto news section following the fast-paced development of the digital yuan. However, the scams and the hacks continue to outshine the progress the crypto industry is making in the country. The latest news from the Asian country revealed that the formulators of a Ponzi scheme were sentenced by a court in the country.

No One Gets Past The Law

China’s Yancheng city’s intermediary court recently ruled that the people behind a $1.1 billion crypto Ponzi scheme were mandated to time in prison as their appeal was rejected. The Chinese citizens charged for operating the WoToken Ponzi scheme and garnered over $60 million that is about 425 million yuan through the scammy project.

The WoToken scheme was carried out by Li Qibing, Wang Xiaoying, Gao Yudong as well as Tian Bo. These convicts were running the platform from July 2018 all the way to October 2019. The platform had acquired a total of 712,248 users from China as of October 2019. Several crypto assets worth $1.1 billion [7.769 billion yuan] were accumulated by these fraudsters. This included 6,841797 EOS, 46,050 BTC, 292,590 LTC, about 2 million ETH as well as 286 million USDT.

The aforementioned convicts managed to harvest this profit by luring in its users’ by offering handsome returns. The WoToken trading portal had its native crypto asset the WOR token. While the court sentenced all these criminals to 2.5 to 8.8 years of prison, the funds they collected through this Ponzi scheme was acquired by the police and would be given to the state treasury.

Furthermore, Dovey Wan of Primitive Crypto revealed that one of the criminals part of this Ponzi scheme was also a member of the PlusToken scam project. China is undoubtedly the hotbed of crypto scams. The PlusToken scam was one of the biggest busts that the Chinese police would have made. More than 100 people were arrested by the police in light of being involved with the fraudulent project. Additionally, this year witnessed an array of crypto scams ranging from $14 million all the way to the most recent one of $1.1 billion.

Filed Under: News, Altcoin News, Bitcoin News, Crypto Scam Tagged With: China

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